Financial mismanagement in plain sight of PDB

Published: 00:00, Jan 16,2020


STATE-OWNED power distribution companies have not been able to build reputation of being consumer-friendly. There have been allegations of arbitrary power price increase. There have also been allegations of corruption against Power Development Board officials. Consumers have recently taken to the streets demanding that the authorities should return the security deposits that consumers have made at the time of obtaining connections. The distribution companies realise the money from consumers against any unpaid bill and the amount roughly equals to two months’ unpaid bill depending on the types of consumer. Consumers who have held protests have switched to the prepaid system and the logic of security deposit falls through as they pay in advance for power. In 2017, the Bangladesh Energy Regulatory Commission also supported the claim and said that consumers switching to the prepaid system should get back their deposits. PDB records show that more than 11 lakh consumers have installed pre-paid meters but no arrangement has been made to return the money.

What is more worrying is that the authorities have no clear stand on the use of the fund created with security deposits. Since 1960s, as the commission says, the distribution companies have collected Tk 4,700 crore in security deposit and rough estimates suggest that the piled-up money should have earned Tk 165 crore in bank interest only in 2019. It is a standard practice that the interest generated on security deposits is distributed among consumers every month by adjusting it with their bill to give them an instant relief against the increasing power cost. In Bangladesh, no consumer has ever received their security deposit back. Power distributors, however, consider the accrued interest as their income and are not held to account for spending the money. In 2017, the commission asked the distributors to separate the security deposit from other transactions. The authorities, however, claim that the interest on deposits has always been adjusted to power tariff and also acknowledge that they have no records of the money taken from consumers four decades ago.

It is evident that the power distributors and the board have taken security deposits from consumers without a plan to use the fund to consumers’ benefits. It is time that the government returned the security deposit to consumers with interest and made a plan on the use of the fund for consumers’ benefits.

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