Recently Bangladesh Petroleum Corporation (BPC) has decided to award the contract for building a deep-sea liquefied petroleum gas (LPG) terminal in Maheshkhali to a consortium of three companies. Two of the three companies, namely Vitol and PowerCO International, have questionable backgrounds, making many concerned about the project.
Swish trading firm Vitol was reportedly penalised $164 million last December in the United States because of its illegal activities to boost its business through unethical means such as bribing Brazilian officials. Because of its record, the company has made many sceptical, as has PowerCO International, another company of the consortium. Incorporated in 2017, its paid-up capital is only $100, which has raised many eyebrows after it won a share in the $305 million project.
This particular contract, along with many others, reaffirms the problem in our energy sector, which has been reeling under a lot of problems for decades, first of which is the lack of coordination between various stakeholders in the sector.
Currently, Bangladesh is increasing its electricity production in a way that's not favourable to the people. Lack of coordination among various stakeholders is causing increased production of outpacing demand. Gas, Coal, Oil and Nuclear powered power plants will, according to a government assessment report, produce electricity in such a volume that 66-67% of it will remain surplus by 2023-24! In some cases, certain stakeholders in the energy sector have even been trying to extend the COD (Commercial Operation Date Fix up) to 2030, increasing the power generation capacity further and is not conducive to the public interest. All of these are pushing the electricity price for general consumers and contributing to unnecessary and wasteful public spending.
Then there's the factor of vetting or doing backgrounds checks before contracts are awarded to certain companies. Government officials must engage in fair practice and follow international standards while dealing with energy projects. Unless standards are followed in projects ensuring transparency as well as fair competition among bidding companies, misappropriation of public funds, corruption and wastage would only increase.
Companies like Vitol, which has already been penalised for bribing officials in Brazil in shady deals and PowerCo, a company with a paid-up capital of just a hundred dollars, should have been investigated far more intensively before the contract of a $305 million project was awarded.
Such practices paint a bleak picture of the dealings in the energy sector. Energy companies and projects have been subject to unprecedented corruption, negligence and incompetence for years.
Bangladesh has in the past seen affairs like 'Niko graft case' and many scandalous irregularities in the energy sector, which is why we cannot remain indifferent about this. Passing legislation like 'Power and Energy Supply Enhancement Act' can't help the public unless transparency and proper coordination among various sectors are brought about. These will create a dynamic and transparent energy sector that can ensure the best services and lowest prices for the populace. For years, the energy sector of Bangladesh has been experiencing incompetence and corruption at a level unseen in most countries, which have cost the taxpayers enormous amounts of money in form of government subsidies and budget overruns.
Awarding important infrastructure projects to unqualified companies may also result in disastrous results in future. It may also lead to technical difficulties later on, which may cost the people additional money, not to mention the physical risks of unstable energy infrastructures.
Finally, the government must replace administrative officials and secretaries from management boards of government-owned energy companies. The administration should ensure a fair playing field, detect irregularities and rectify issues rather than obstacles in the area itself.
Government-appointed secretaries and officials heading energy companies can face conflicts of interest in various issues, including contracts distribution. Whether it's a state-owned enterprise or a private one, the government must ensure that the international standards and procedures are followed to save our energy sector.
We, the ordinary people and the consumers deserve a fair and transparent energy sector that serves us. Corruption, unsolicited commercial projects, and uncoordinated plans have been denying the people cheap, safe, and reliable energy production for decades. For the advancement of our society and the development of Bangladesh, all these irregularities need to come to an immediate halt with transparent public-private partnerships and proper government initiatives paving the way for a better future for all.
Dr Shamsul Alam is Energy adviser to the Consumers Association of Bangladesh