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Over five months of the interim government have passed, there are still no effective initiatives to rein in power and energy sector profiteers, undermining the government’s ongoing effort to bring in economic and other reforms.

Energy experts said that there were laws to stop the profiteers, unjustly benefitted throughout the past Awami League regime, bleeding the economy under the protection of now-defunct indemnity law.

There are also other ways to get the profiteers to the negotiation table to reduce excessive tariffs awarded to them through unequal power deals and end their many illegal practices, they said.

By continuing to subscribe to the profiteers’ service since assuming power on August 8, 2024, the interim government is rather validating their existence, weakening its own case, energy experts said.

The interim government repeatedly said that the task of cancelling power and energy deals, signed under international law, was tough, especially financially, as it involves the payment of billions of dollars.

‘The government has to realise that allowing the profiteers to operate is even more harmful,’ said economist and rights campaigner Anu Muhammad.

‘Besides pocketing huge profits, the profiteers will ruin environment and public health,’ he said.

Bangladesh suffers from over 50 per cent overcapacity following a more than five-fold expansion of fossil-fuel-based power plants during the AL regime ousted on August 5 amid a student-led mass uprising.

The massive expansion occurred through power deals almost without tender, offering unjustified privileges to power sector investors.

For instance, up to 73 per cent excessive capacity charge was given to many of the companies. During the AL regime, over Tk 1 lakh crore was paid to idle power plants.

If the government wishes to exit a power deal, the government would, in most cases, have to pay 85 per cent of the income that the power plant would have made over its lifetime.

A power plant could last from 15 to 25 years. Bangladesh also spent far more than the other countries in building power plants — $2.4 billion spent in constructing a 1,320MW coal-based power plant. The past government invested $33 billion in its 15 year’s regime in the power sector alone.

The power deals, replete with other privileges, including opportunities to manipulate fuel price, have spared many power producers to pay discount on imported fuel.

‘There are many instruments to prevent these profiteers,’ said Hasan Mehedi, member secretary of the Bangladesh Working Group on Ecology and Development, a platform of green activists.

International laws, energy experts said, entertains the concept of odious debt, which defined the national debt incurred by despotic regime as illegitimate debt and there are precedents of countries refusing to pay odious debt. The past AL regime was autocratic as it had rigged the past three elections to hold onto power.

‘We have a clean case of deals passed under pressure or influence or through fraudulent practices, bypassing the public procurement policy,’ said M Abdul Quaiyum, a Supreme Court lawyer, who recently moved the court seeking order to scrap the unequal deal signed with the Adani Power by the past government.

The court ordered the government review the Adani deal and report to it by January 25.

The government is also under instructions from the High Court to review all power, energy deals since the indemnity law used to pass the deals was declared illegal.

Many power, energy deals require investors to follow the country’s existing laws, which were generally overlooked during the AL regime, apparently to maximise the profits of AL favourites.

For instance, the 1,234MW coal-based Rampal power plant, a joint venture with India, operated for almost two years till the past year without using effluent treatment plan, releasing wastewater directly into the River Maidara.

Coal is handled openly at the Rampal, leading to its direct release into the air and river while facilities such as coal-shed, coal stack yard and ash silo were not completed as per the plan.

Power plants are supposed to renew their environmental certificate and environmental management plan every year. The DoE is supposed to update the list of environment certificate by March 31 every year. The DoE also has the responsibility to assess industries’ ability to assess environmental impacts and implement their environmental management plan.

Department of Environment director Masud Iqbal Md Shameem claimed that power plants regularly updated their environmental certificates.

He, however, failed to provide an account of such certificates renewed this year.

SC lawyer Qazi Zahed Iqbal said that treaty signed under international law could be challenged or even have declared void for contradicting or violating domestic law.

‘Deals going against domestic law will have no legality. Environment is protected by the constitution,’ he said.

Energy experts also called on the government for withdrawing numerous special privileges still being enjoyed by power plants to let their authorities know about its uncompromising stance and bring them to the negotiation table.

Power plants have 100 per cent tax exemption on their income until 2034. Their foreign employees and consultants enjoy income tax exemption. Power companies do not pay tax on interest paid under loans. Supplementary and import duties on machinery and spare parts are also exempted. Coal importer’s tax was reduced to 5 per cent from 15 per cent.

Private furnace oil importers often use their half capacity to be illegally benefited by the provision of 9 per cent service charge. A BPDB account showed that Bangladesh had spent 20 per cent extra on furnace oil import during the AL regime. Many companies are also using fake offshore companies to import furnace oil to avoid paying 25 per cent customs duty. There are also allegations about companies importing more furnace oil than they need to generate power.

‘Widespread corruption must have left many cues to hold the profiteers accountable. The government just needs to launch a thorough investigation,’ said Sharif Jamil, coordinator of the Waterkeepers Bangladesh, which works to protect the water and water bodies in Bangladesh.

Experts said that there were also amicable ways of settlement by simply inviting all power and energy businesses to talks. Many power plants have been in operation for 15 years though they earned a handsome profit on their investment in the first three to five years.

Consumers Association of Bangladesh energy adviser Shamsul Alam refused to accept the government’s excuse that there were not many ways to come out of power and energy deals.

‘What kind of law allows such injustice to continue?’ asked Shamsul.

‘The power plants were built in violation of laws, allowing stealing from people’s pocket. Are we saying there is no way to stop that?’

BPDB chairman Rezaul Karim said that several committees were working on the matter to find out unnecessary deals and the way of getting rid of them.

‘We cannot give a precise date when we can do that,’ he said.