At least five factories were shut down and production got disrupted in all the 90 factories in the Dhaka Export Processing Zone on Tuesday following a suspension of the gas connection to the plant supplying electricity to the industrial area.
The state-owned Titas Gas Transmission and Distribution Company was compelled to suspend the gas connection to the 86MW power plant, owned by the United Power, a private company, which owes Tk 478 crore to the Titas in unpaid bills.
The unpaid bills accumulated over the years during the tenure of the past Awami League regime when the United Power bypassed existing policies and ignored court orders to pay less than what it should have paid.
The United Power made it to the White Paper on the economy, published by the interim government in December last year, as an AL crony which raked abnormal profits by various means.
鈥楢fter sending numerous letters, requests and warnings, we had to come to the decision of suspending the gas connection on Monday afternoon,鈥� said Kazi Mohammad Saidul Hasan, general manager, Titas Gas.
The gas connection was discontinued exactly at 1:06pm on Monday, said Shariful Islam, executive director, DEPZ, bringing operations to an instant halt.
Factories resumed operations on back-up generator support.
On Tuesday morning, five factories sent back home about 6,000 workers as they were unable to find a way to start operations.
Sharif, who was interviewed over phone at 3:30pm on Tuesday, said that the closed factories found using furnace oil for power generation to operate unviable.
About 70 per cent of the remaining 85 factories at the DEPZ started operating at about 8:30am when the DEPZ authorities managed to get some electricity supply from the Rural Electrification Board. Starting initially with 20MW, the REB supply reached 35MW in the afternoon. The DEPZ鈥檚 power demand is 45MW.
About 30 per cent factories were operating at a reduced capacity using backup generators, said Sharif.
The disruption in the DEPZ functioning was inevitable since its factories depended on a monopoly power business run by the United Power.
The United Power had been operating as a commercial independent power producer, a special categorisation enjoyed by none other than the company, selling its power to factories at the DEPZ, the national grid and private clients.
There are different rates paid by power producers for their gas use. The CIPP is meant to pay the captive rate, Tk 30.75 a unit, far higher than the rate paid by independent power producers 鈥� Tk 15.50 a unit.
Initially, the United Power鈥檚 two power-generation units used gas at the captive rate, which the company stopped paying in 2009 after the AL government assumed power. The United Power also supplies power to the CEPZ from its 8.73MW power plant.
鈥楾he United Power had been paying a flat IPP rate to get gas from us,鈥� said Saidul.
The United Power profited Tk 4.61 per kWh in addition to its regular margin from selling electricity produced at its DEPZ plants by denying to pay the captive rate, a Bangladesh Power Development Board analysis had revealed.
The cost of producing a unit of power using gas at the IPP rate is Tk 6.41, far less than Tk 11.03 that the United Power gets by supplying a unit of electricity under a contract signed with the Bangladesh Export Processing Zone Authority.
The IPP rate is meant for independent power producers who supply electricity to the national grid and are not allowed to privately sell electricity.
Authorities did not object to the United Power switching to the IPP rate until 2018, when they first demanded separate rates for gas used in producing electricity sold to the national grid and commercial clients.
A prolonged legal wrangle ensued when the United Power went to the High Court challenging authorities鈥� demand for separate rates. The legal battle ended with the review of the Appellate Division order in February 2024 that went against the United Power.
