Poor power distribution major problem for industrial growth

State Minister for Energy and Mineral Resources AKM Mosharraf Hossain speaks at a seminar on 'Economic impact of poor power quality on industry in Bangladesh' at a city hotel yesterday. Photo: STAR

They said the existing position of generation and transmission of power could be acceptable to some extent, but the distribution system at the end users level is absolutely frustrating with fluctuating voltage and frequent interruptions.

"If Bangladesh wants to provide quality electricity to consumers, it has to bring discipline in the distribution system reducing the non-technical losses," said Sri Lankan professor Priyantha Wijayatunga in the seminar as keynote speaker.

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State Minister for Energy and Mineral Resources A K M Mosharraf Hossain attended the seminar on "Economic Impact of Poor Power Quality on Industry in Bangladesh" as chief guest at a city hotel.

South Asia Regional Initiative (SARI)/Energy and the Nexant conducted a study on the power sector, where they found Bangladesh accounts an annual loss of over Tk 4,500 crore due to poor power supply.

The loss is equivalent to 1.72 per cent of the national Gross Domestic Product (GDP) and 11.54 per cent of the industrial sector GDP. The study released formally at the seminar said the industrial sector is the worst sufferer of the power crisis, which alone faces a production loss of over Taka 1,160 crore per year.

The cost of doing business in Bangladesh has gone up due to erratic power failure. Almost 64 per cent of industries have to depend on generators to meet the emergency electricity that led industrialists for higher energy costs and adverse environmental impacts.

The RMG sector alone has to count 10 per cent extra cost for generating power from generators run by fossil fuels. The study said that almost 95 per cent entrepreneurs' feel that they have been paying higher for low quality power consumption and 50 per cent expressed willingness to pay more provided reliable electricity is supplied.

Mosharraf said the main problem in the power sector lie on distribution system instead of generation or transmission.

The generation can somehow match the demand, but the distribution system makes things difficult, he said. Underlining the need for modernisation of distribution system, he said if the consumers are willing to pay more it would be easier to ensure reliable electricity in a short span of time.

Ferdous Ara of Dhaka Chamber of Commerce and Industry (DCCI) contradicted with the state minister saying the enhanced power price would only increase the cost of production and push products into more competition.

She also criticised the study for ignoring plastic, shrimp processing and ceramic industries. Alamgir Kabir of Power Cell said the power sector needs urgent investment to increase the generation and improve the distribution and transmission system.

We need 10,000 US dollar for producing only 1 MW of power, he said adding that private-public participation is a must to reform and restructure the fragile electricity sector.

He also underscored the need for inviting private entrepreneurs in the distribution system and rationalisation of tariff for domestic consumers, who consume electricity with around 50 per cent subsidy.

Bruce McMullen of USAID said there must have a strong regulation in the energy and power sectors in the country. He also referred to the strong political will in this regard.

AMCHAM President Aftabul Islam, Deputy Director of DCCI Hasanur Rahman, President of Enertech International Kendrick Wentzel and Vice President of Nexant Hugh McDermott also spoke.