The new budget has completely ignored the impact of Covid-19 on the country's power and energy sector which has already plunged into a very deep financial crisis due to the pandemic.
The budget tabled a typical allocation for the sector in line with the last fiscal year's and hyped on further expansion of power and energy generation and imports.
It did not recognise that due to the pandemic, energy sales have hopelessly plummeted. The budget did not spell out any strategy to minimise the financial burden and boost energy sales.
The current situation demanded that the government go back to the drawing board and suspend all new power and energy projects that are not under implementation to save money and reduce financial burden. But this was not talked about in the budget.
The situation also demanded that the government focus on improving the quality of power and energy supply so that the sector's revenue stream can improve. We have surplus power but we still have load shedding due to a poor power distribution system. Again this was not in the budget.
Power and energy had always been a costly operation. During most of the time in the last decade, the power sector had seen red due to high costs of power and energy compared to low-cost sales. But there had been a steady demand growth of 10-12 percent per year in line with the economic growth.
But unlike other years, the demand for power or gas has not grown by 10 percent. The peak power demand in a sultry summer day last year was over 12,000 megawatts – a milestone which is yet to be touched this year. But this was supposed to grow by at least 1,200 megawatts by this June.
Given this year's situation, the power division sought a Tk35000 crore pandemic bailout as it is not earning enough to pay for energy imports, contractors' payments and various obligations.
The government has not yet taken into cognisance that Bangladesh is already saturated with power supply. The nation now can generate up to 24,000 megawatts of power (including captive generation capacity) against half of its demand. Yet, Bangladesh keeps on importing 1,160MW of power from India; and keeps paying penalties to a large number of private plants for keeping them idle.
Bangladesh is also importing a big supply of liquefied natural gas (LNG) – half of it is now unnecessary.
The government has not also recognised in the budget that although there is enough power in the country, there is load shedding too because a good part of the power distribution lines are old and faulty. Because of load shedding and voltage fluctuation in the distribution system, industries still prefer to generate their own power. This is such a wasteful practice.
The finance minister yesterday talked about a mega plan to take the country's power generation up to 60,000MW by 2041. He talked about four dozens of power plants under construction and signing of agreements for construction of a dozen more plants. In total, the government now has enough contracts to almost double its present capacity.
This is not to mention that we already have very large coal power plants and the Rooppur nuclear power plant is coming up soon.
Even if we did not have the coronavirus crisis this year and even if the world economy was normal, the power projects under implementation are more than enough for the next six-seven years.
But the government keeps on rolling out plans like we have no problem selling the energy.
The finance minister also talked about importing power from Nepal, Bhutan, northeast India and Myanmar. If this is meant for one decade later, it is fine. For now, foreign payment for energy has become a big burden. Proof? The energy ministry has asked the national gas companies to encash their fixed deposit receipts to pay various dues.
Every crisis should be handled in a way to turn it into an opportunity. The pandemic should have stimulated new thinking in the government to reduce costs and increase sales by improving energy quality and management.