top of page

Inflated cost of transmission line project sought by JVC

Sep 29, 2024

| FHM HUMAYAN KABIR | The Financial Express

Another expensive project undertaken by the past government has thrown the state exchequer into a quandary as the cost of power-transmission line from Pyra has more than doubled, insiders said on Saturday.


The massive 135-percent cost escalation of the Pyra-Gopalganj-Aminbazar 400kV double-circuit transmission- line project's 2nd phase has put further pressure on Bangladesh's foreign-exchange reserves, they said.


When the project-implementing agency seeks revision, the Ministry of Finance (MoF), Bangladesh Investment Development Fund (BIDF) sent back the project proposal and informed about government incapability of affording such fund escalation from the foreign-exchange reserves at this moment, officials at the ministry said.


The implementing agency-Bangladesh-China Power Company Private Limited (BCPCL)-- has recently sought revision of its project with bloated cost from the Ministry of Finance (MoF), they said.


In the name of expansion of length of a part of the transmission line for crossing the Padma River, the company has sought 135-percent higher cost for the Tk 38.90-billion project.


The lion's share of the project cost is being financed from the Bangladesh Investment Development Fund (BIDF), created from the foreign-exchange reserves by deposed prime minister Sheikh Hasina's government in 2021 for undertaking public-sector development projects.


The government assigned the MoF for managing the BIDF funds and the relevant projects.


The past government inaugurated the BIDF in March 2021under which $2.0 billion was supposed to be invested annually in different development projects from Bangladesh's foreign- exchange reserves.


Out of the estimated Tk 38.90 billion cost of the Pyra-Gopalganj-Aminbazar 400kV grid line, the major part worth Tk 26.56 billion was supposed to come from the BIDF and the rest from BCPCL's own fund.


Now BCPCL has now sought revision from the MoF with an inflated Tk 91.37-billion cost with a hefty amount of Tk 69.94 billion from the BIDF.


According to BCPCL, they have sought the revision mainly for changing some scope of works and exchange-rate fluctuation.


"The length of the grid line for crossing the Padma River has been enhanced to 12km from the previous estimation of 6.77km. So, a good amount of funds has increased here," says a BCPCL official to explain reasons.


He also points out that the USD exchange rate against BDT has also escalated to Tk 117 now from only Tk 84 two years back, when they undertook the project.


A senior MoF official has said they have already sent the project back to the Power Division and sought detailed reasons behind the cost escalation.


"We have also informed them that the government is not in a position to provide extra funds from the BIDF amid the foreign -exchange- reserve crisis," he told the FE, requesting anonymity.


"Why the scope of works, especially the river-crossing length, will escalate? And has the 135-percent cost escalation been rational in the name of 6km extra line expansion for river-crossing and for the exchange-rate fluctuations?" he questions.


"Actually the government has to provide the funds from the foreign-exchange reserves. So we are very cautious on the project and their demands," the MoF official says.


Meanwhile, a Power Division official has said there was a political motivation in selecting route from Pyra power plant to Aminbazar in Dhaka through Goplaganj. If the gridline route is designed straight avoiding Gopalganj, the overall cost of the project might be reduced.


Meanwhile, no responsible persons from BCPCL were available for immediate comment in this regard.


The BCPCL, a joint venture of Bangladeshi public company North-West Power Generation Company Limited and Chinese public company National Machinery Export Import Corporation, undertook the 256.314km 400kV double-circuit national grid-setting project in 2021.


The project has been taken up for evacuating electricity from the Coal-based Pyra power plant in Bangladesh's southwestern Pyra seaport area.


The company is already supplying power from the newly set-up 1320mw-capacity thermal power plants at Pyra by investing US$2.06 billion.


News Link: Inflated cost of transmission line project sought by JVC

bottom of page