Slow-Grid Projects Limit Power Generation Benefits
Even though the country has reached record power generation capacity, grid expansion for better power distribution has not kept pace with growth.
There are 17 projects involving Tk 63,739 crore to construct a reliable and uninterrupted power transmission system, but their implementation pace is much slower than desired.
The Power Grid Company of Bangladesh (PGCB) has installed only 2,588 kilometers of transmission lines of various capacities in five years to 2020 against a target of 8,000 km set in the seventh five-year plan.
Power industry experts say the expansion of the transmission line is not keeping pace with the rapid growth in power generation capacity, due to delays in project implementation caused by planning errors and negligence.
In the five years since FY2015, the length of the total transportation system has increased by only 26.69% to 9,695 km, while the generating capacity has increased by almost 74% to 23 548 megawatts at the end of fiscal 2020 versus 13,540 MW, according to Planning Commission data. .
Project managers blame the delays on the complexity of land acquisition, different conditions set by development lenders, longer time to prepare tender documents and selection of contractors, and the slow disbursement of funds.
In this situation, the experts call on the government to speed up the implementation of the selected projects for the reinforcement and extension of the transmission network in order to ensure the best value for money invested in the electricity generation capacity.
Energy expert Dr Mohammad Tamim told The Business Standard that it doesn’t make sense to undertake such big projects if they can’t be implemented.
“We need to increase the number of substations along with installing the necessary transmission lines to build a reliable transmission system. But we don’t see any initiative other than just approving the projects,” he said.
How delays get longer
Some 13 of the 17 project deadlines were extended one or more times. The other four relatively new projects will also require a time extension as their progress is freezing.
For example, the PGCB started the implementation of a project to install a total of 265 km of transmission lines, including the 28 km Ghorashal-Tongi double circuit transmission line in July 2013 with a June 2017 deadline.
The four-year project duration was extended for a further five-and-a-half years as the power grid company was unable to start the project at full capacity within the time frame.
In another example, the “400/230/132kV Grid Network Development Project” will see its extension end next December with more than 15% of the work still to be done. But the authorities do not intend to complete the project by the current fiscal year and are seeking to extend the deadline further.
Md Farid Ahmmed, Project Director and Chief Engineer of PGCB, said there were strong reasons behind the unexpected delay.
The project was approved in 2013 and physical works started in 2018. The late start was due to a delay in awarding the contract. Work on two substations has not yet started.
He said that work on the components financed by the Asian Development Bank has been completed, those financed by the Islamic Development Bank are lagging behind and that is why the project will not be completed under the ongoing exercise, he added.
Delays leave Payra plant underutilized
The 660 MW unit of the Payra thermal power plant remains idle as the Power Grid Company of Bangladesh failed to fast track the 174 km 400 kV double circuit line project from Mongla to Dhaka.
The double-circuit line passing through Gopalganj along with other infrastructure was to be constructed by June 2020 under a project launched in July 2016, to transmit 4,000 MW of electricity to the capital from Payra, Rampal and d other power stations. The four-year project was granted a three-year extension.
The Implementation Monitoring and Evaluation Division (IMED) of the Ministry of Planning expressed concern in 2020 that the capacity of the Payra Thermal Power Plant would remain underutilized due to any delays in the project.
The revised project involving Tk 2,505 crore is expected to be completed by next year with a cost increase of 85% from the original cost of Tk 1,357 crore.
As of 2016, the Dhaka-Chattogram Main Power Grid Reinforcement Project was expected to install 227.5 km of transmission lines by 2020. Even though the deadline was extended for another two and a half years, the project could reach 71% progress.
The project’s mandate for energy efficiency in grid-based power supply has been extended to December 2024, which was expected to be completed by June last year.
With only 33% progress in six years, doubts also remain over the completion of the 177 km transmission line in eight years.
Work on the Rooppur grid is also slowing down
The Executive Committee of the National Economic Council has approved a project to develop 669 km of transmission line by December this year, starting from April 2018, to evacuate 2,400 MW of electricity to the national grid which would be generated from Rooppur nuclear power station.
The authorities have extended the deadline for the project to December next year and could use 27% of the total allocation of around Tk 10,982 crore.
The power grid reinforcement project has been ongoing since October 2016 with Tk 14,326 crore. A 765 km transmission line and substations of different capacities were to be installed last year under the project with the help of China.
In the past six years, less than 16% of work has been completed on the project, according to the PGCB.
The four-year, nine-month project has had its time extended by three years to 2024.
Overreliance on foreign lenders
About 60% of the costs of 17 transmission line construction projects are implemented with foreign loans.
Experts say project implementation is being held up by over-reliance on external funding. It takes time to comply with the various terms and conditions set by the development lenders and get the money released.
Energy expert Dr Mohammad Tamim said that to speed up transmission line projects, the government needs to spend more from its treasury, thereby reducing reliance on foreign loans.
The Annual Development Program (ADP) allocation for FY23 is Tk 2,56,003 crore, with the foreign aid share targeted at Tk 95,833 crore. Foreign aid disbursements have fallen to less than 30% in recent years due to the inefficiency of implementing agencies in spending these funds.
Planning Minister MA Mannan told TBS that they had given the green light to all projects undertaken for the development of the electricity sector.
It is very regrettable that the work on the transmission line expansion projects has not been completed on schedule, he said.