‘They receive a 16-year capacity fee. ‘Not anymore’

Muhammad Fouzul Kabir Khan, a retired bureaucrat, was tasked with heading three important economic ministries: energy, energy and mineral resources; road transport and bridges; and railways.

Daily Star sat down with him for an in-depth interview about the previous Awami League-led government’s plans for three ministries mired in allegations of mismanagement and corruption.

The Daily Star: How has your experience been so far?

Advisor: Over the years, people have noticed that per capita income is increasing, GDP growth is high, the economy is growing, etc. They heard stories about developments. But people could not relate themselves to these large numbers; their lifestyle was against the numbers.

The Awami League-led government had created a chain of corruption. Those who belonged to the chain were the only beneficiaries. As a result, people wanted an overhaul of the system, an end to all forms of corruption. Therefore, our main focus is on what people want and what their expectations are.

DS: What is the current situation in the energy sector?

Advisor: Here too, a corruption network was created and the basis of this architecture was the Compensation Law of 2010 (Rapid Development of Electricity and Energy Supply-Special Provisions).

Decisions made under this law were not subject to proper scrutiny; some were given full benefits. That’s why we decided that we will not continue this action. We have established an independent committee to examine all agreements signed under this law.

We have suspended new projects taken within the scope of this law, and we are also reviewing projects that have started or are close to completion.

We float tenders and follow the 2008 Public Procurement Rules when taking on new projects or procurements.

DS: What will be the fate of power plants that receive capacity charging without producing electricity?

Consultant: We do not extend any agreements with such power plants. We said that the term of office of any factory would not be extended. Some people came to me and said that if we don’t extend the mandate, it could create problems in certain areas. But we asked them how the 5-year agreement was extended to 16 years. You have benefited from capacity charges for 16 years; You don’t use it anymore. Electricity tariffs increased due to rapidly rented power plants.

DS: How do you see the energy sector when you leave your position?

Consultant: The main problem in this sector is the insufficiency of energy supply. Our gas production is decreasing. We attach importance to gas extraction through BAPEX. It is planned to drill 50 wells next year and 100 wells next year.

Our next strategy will depend on the success of the drilling process. If we have at least 1-2 trillion cubic meters of gas reserves, we will determine a strategy. Otherwise, we will import liquefied natural gas.

If necessary, we will install two more floating storage regasification units. One will be installed in the south and the other in Moheshkhali. But we will enter the tender process.

We are also working on how we can import cheaper fuel. We are also trying to reduce the subsidy burden of Bangladesh Energy Development Board without increasing the electricity tariff.

There have been attempts to open tenders for 40 renewable energy projects and these will reduce electricity tariffs.

DS: What is the current debt situation of the electricity and energy sector?

Consultant: When we took office, a few companies wrote to us that if we did not pay their dues within a certain period of time, they would stop supplying. India’s Adani Power also emphasized its payments.

There was around 1.2-1.5 billion dollars of debt in the energy sector alone. This is now down to $700 million. At present the situation is quite satisfactory.

DS: You restricted the ministry’s authority to set fuel prices to create a strong Bangladesh Energy Regulatory Commission, but some products such as diesel, gasoline and jet fuels are still determined by the Bangladesh Petroleum Corporation. Do you have any plans to let BERC deal with such products in the future?

Counselor: We need to think more about this. Fuel prices in the global market sometimes rise rapidly and sometimes experience serious declines. There is a method for fuel pricing; If the price rises too much in the global market, the government may want to keep it normal by providing subsidies. However, if the responsibility is given to BERC, manual pricing will be applied and public interest may be endangered. We will discuss this further.

DS: Electricity customers are tired of postpaid and prepaid meter charges. Do you have any plans?

Counselor: I even get questions from my relatives about this. Consumers of all kinds are fed up with these meter fees. We told BERC to first define the problem; Let’s see what we find.

DS: People want to know the status and future of megaprojects.

Consultant: I also visit such project sites. I am disappointed everywhere that most million dollar projects do not have the public interest in mind. Most of them were handled taking into account the vested interests of some groups.

It was never considered how the projects would serve the public and how many people they would serve. For example, the Padma rail link project was taken up at a cost of Tk 40,000 crore. I asked the officials what their revenue target was and they said around Tk 1,400 million per year. When I wanted to know the current income, I learned that the project had generated Tk 37 million in revenue in the first six months.

Once the line connects Jessore to Bhanga, revenue will increase, but by how much? It may go up to Tk 80 million or Tk 100 million, but where will Tk 1,400 million come from?

Let’s look at another project in Matarbari area of ​​Cox’s Bazar. A port and export processing zone (EPZ) needed to be built in the area, and these would require electricity. This makes perfect sense.

However, when I visited the area, I saw that there was no port or EPZ. However, the power plant has already been completed. Why is this? Because someone involved in the corruption network wanted a power plant and bought it. Where is the public interest in a project worth ₹42,000 crore here? It remains only on paper.

DS: How do you define such projects and what will happen once they are completed?

Advisor: These are all vendor-driven developments in the public interest. Vendors asked for business and the government rewarded them. There was no collaboration between projects. For example, there is a power plant, but the transmission line has not been completed yet. If there is a pipeline, there is no gas source. We try to get results at lower costs by establishing connections between completed projects.

DS: Let’s talk a little bit about the transportation sector.

Consultant: The same, the characters of the projects are not different. The cost of repairing a road is huge. Although they followed PPR and introduced good e-procurement practice, we saw some gaps in the process. E-auctions have changed the culture of using muscle power to win tenders. But the corruption of those who make the tenders or manage the process is more deterrent than muscle power.

DS: Can you give us examples?

Consultant: Some of the project managers inform the vendors of the base price of the bid. Some tender advertisements are designed to award a prize to a pre-selected supplier. As a result, the people who win the contracts are the same partisan people who are in touch with the government.

There is also an item that requires experience. As a result, strategies that experienced people can benefit from have been adopted. In the next project, conditions were created so that only the blessed could benefit. This is how oligarchs were created in every sector.

DS: Does this mean the PPR will be reviewed?

Advisor: Yes, we have constituted a committee of advisors including Wahiduddin Mahmud, AF Hassan Ariff, Syeda Rizwana Hasan and Adilur Rahman Khan. I’m also there to review PPR. Now we read the worksheets.

DS: Extending the project duration has become commonplace.

Counselor: It has become a culture. There are some arguments for increasing tenure, but most of them are counterintuitive. We took a position here: Projects must be completed within the given time.

DS: What is the state of the railway?

Advisor: There are problems with the train schedule and routes. Many people complain about not being able to buy tickets online. We took action to investigate whether there were any irregularities in the ticketing app Shohoz. We have a lack of locomotives and wagons, and line deficiencies. There are unnecessary projects here too.

DS: A metro line was built in Dhaka. What will be the fate of other metro projects taken by the previous government?

Advisor: There are no plans to cancel metro initiatives. However, project costs will be reviewed.

We try to place the right people in the right places. Interestingly, the former managing director of Dhaka Public Transport Corporation MAN Siddique created a rule that no one except former secretaries can hold the post and did not create a successor. This is a technical place; How can a former secretary be influential here?

Those with knowledge of metro rail system operations will lead the management of the metro rail system company in Dhaka. There are many Bangladeshis abroad. We will form a technical committee to find the right person.

DS: There is very little time and the public’s expectations from this government are very high. The results are not showing yet.

Advisor: People don’t see the work behind the scenes. The results will be seen soon; people will feel it.