Unprepared port propels Payra power’s imported coal price

The Payra coal-fired power plant is importing the first batch of coal from Indonesia today for its test run — but at a higher transportation cost.

A large ship with a capacity of 70,000 tonnes will carry only 30,000 tonnes of coal to a jetty near the Payra deep seaport.

The freighter cannot bring coal to its full capacity because the port does not have a deep enough draft to handle heavy ships.

Project sources said the price for transporting this amount of coal will stand at around $25 to $27 per tonne, although it would be $18 if 70,000 tonnes could be imported at a time.

This implies that Bangladesh will have to pay the additional charge as penalty for unutilised capacity.

The authorities concerned could not rent a smaller ship as all long-haul ships for carrying coal have a 70,000-tonne capacity each.

The 1320-megawatt Payra power plant, set for partial generation from next December, will have to pay an extra cost of around $36 million annually for coal transportation until the Payra port is ready to operate as a deep seaport.

This will increase the cost of the project as well as the per unit electricity generation, as per the project implementation agency.

PT Bayan Resources Tbk, an Indonesia-based coal mining company, is supplying the coal under an agreement with the Bangladesh-China Power Company Limited, the project implementing agency.

The country will import four million tonnes of coal annually for this plant at a rate of $70 per tonne with another $18 as transportation cost.

"As the port is not ready, cargos carrying coal will come half-loaded and we will have to pay the full charge, which means a doubling of costs," said Shah Abdul Maula, project director of the Payra thermal power plant.

For a fully-loaded freighter to ply smoothly, there should be a 12 to 13 metre depth in the riverbed, which is now only four to five metres around the Payra port, he added.

The more alarming issue is that even a half-loaded ship during the dry season would not be able to anchor at the coal jetty due to poor navigability, he further said.

As a result, the ship will have to carry half its capacity, or else it will get stuck in the riverbed. 

On the other hand, if the ship comes with full capacity, it will have to anchor at the deep sea, and lighter boats would be required to unload the imported coal, hiking the cost even further.

The Payra Port Authority under the Ministry of Shipping has been working to construct the third seaport by 2021, in three phases, at Payra in Patuakhali, with Sonadia and Matarbari being the other two.

The port authority agreed that coal import will be costlier due to the unprepared port.

"The navigability of the port would improve within two years. Till then, the authorities need to anchor the mother vessel in the deep sea and have to use lighter boats to unload the coal," said Abdus Samad, secretary to the Ministry of Shipping.

Generally, the production cost of a unit of electricity is Tk5. But due to this costly imported coal, one kilowatt power generation at this station would cost more than Tk7.

Currently, the country has only one coal-fired power station at Barapukuria in Dinajpur, which has been operating with coal supply from the nearby coal mine.