Indian conglomerate Reliance has set a time-bound action plan for the government to expedite signing of unsolicited contracts with it for import of liquefied natural gas and installation of, and electricity supply from, a 750MW power plant in Bangladesh.
In a letter on July 16, Reliance’s senior vice-president Sameer Kumar Gupta requested state minister for power, energy and mineral resources Nasrul Hamid to ensure the completion of five specific tasks by July 31, said officials.
The tasks included issuing letter of intent to Reliance by the Bangladesh Power Development Board, initialling land lease agreement by the board, issuing gas allocation letter to Titas Gas Transmission and Distribution Company by Petrobangla and initialling gas supply agreement with Titas for the construction and operation of the power plant.
The tasks also included finalising discussions with Reliance and initialling agreements for the installation and the use for the LNG terminal which would supply 500 million cubic feet of natural gas a day gasifying imported LNG.
Power Development Board chairman Khaled Mahmud said that they were hopeful about meeting the deadline.
Asked if a company could set such time-bound tasks for the government, he declined to comment saying that he was yet to get any copy of the letter.
The government allowed Reliance to implement the projects under the Speedy Supply of Power and Energy (Special Provisions) Act 2010 that indemnified officials concerned against prosecution for making such decisions.
In a move to award the contracts to the companies without tenders, the power board signed two memorandums with the companies on June 6, 2015, the day Indian prime minister Narendra Modi arrived in Dhaka on a two-day state visit, said officials.
Reliance will set up facilities at Kutubdia Island to import LNG and supply 500 mmcfd gas a day and set up and operate a 750MW gas-fired combined cycle power plant at Meghnaghat in Narayanganj. The power plant will consume 110 mmcfd gas, according to the plan.
On May 24, the cabinet committee on national purchase approved a proposal for power purchase agreement under which Reliance would sell electricity from the plant to the power board at 7.3123 US cents (Tk 5.80) per unit or kilowatt-hour for 22 years.
Reliance would receive 2.05 cents in capacity charge against each unit of electricity to be generated from the power plant although the power board pays a local private company 1.52 cents in capacity charge against each unit of electricity supplied from similar plants, said officials.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Foreign affairs