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The interim government appears to continue commercialising the country’s power and energy sector on the prescriptions of the World Bank and the Asian Development Bank, following the footsteps of successive governments, alleged the Consumers Association of Bangladesh on Wednesday. 

The consumer rights body came to the conclusion based on recent steps taken by the government, particularly in its response to resolving the conflict that prevailed between the Rural Electrification Board and its entity Palli Bidyut Samity for a while.

Taking its root in discrimination between employees of the institutions, the conflict also led to the demand that employees on contract or appointed on irregular basis be regularised.

Several thousand employees of the PBS offices in the country have been demonstrating on the Shaheed Minar premises in the capital Dhaka for about two weeks to press their various demands.

The committee that the interim government formed after coming to power in August 2024 recommended turning the PBS into a company as part of a structural reform.

‘The intention to turn the Palli Bidyut Samity into a company is to fulfil the target set by the World Bank and the Asian Development Bank to commercialise the power and energy sector and turn the sector into an import market,’ said M Shamsul Alam, energy adviser at the CAB, at a press conference at the Dhaka Reporters Unity in the capital.

There are 80 Palli Bidyut Samity offices operating under the Rural Electrification Board, supplying electricity to 80 per cent of villages in Bangladesh, a market of 3.60 crore people. Though appointed by the REB, the PBS employees are governed by a separate service rules, which the High Court found discriminatory.

About 40,000 employees of the PBS began their movement against discrimination past year when the authoritarian Awami League government was in power. The movement was suspended several times following promises from the past government that were never met. Instead, many of the PBS employees were terminated and framed in false cases.

After the interim government assumed power, the Power Division formed a committee in September past year to evaluate structural reforms of the PBS and the REB. The presentation the committee made on its recommendations on June 1, according to the CAB, effectively talked about turning the PBS into a company.

The evaluation committee did not have representation from consumers, the CAB said, while pointing out that the committee never disclosed identities of experts cited in its report.

The CAB rejected the committee’s report, accusing it of failing to recognise the impacts on rural consumers of the crisis of electricity and its frequent price hikes.

‘Accepting the recommendation of the committee will be like throwing consumers from a frying pan into a burning stove,’ said the CAB in a written statement read out by Shamsul Alam.

The PBS offices are mostly loss-incurring running on subsidies, the CAB said, while the REB is always making profits. Most of the subsidies, ranged between Tk 60,000 to Tk 70,000 crore, go to the PBS. The proposition that turning the PBS into a company will make it profitable and benefit the consumers does not make any sense to the CAB.

Like in other power entities, irregularities were rampant in purchases and tenders at the REB, the CAB alleged, adding that the rights body had to shelve its plan of probing corruption in the REB due to non-cooperation from the Power Division.    

The power and energy sector has been under a reform initiative prescribed by the ADB and the WB in 1980s, the CAB said, adding that the target of the reforms was to privatise the sector.

The previous governments, including the past AL government, had turned the power and energy entities into companies in accordance with the WB, ADB prescriptions, the CAB said.

There are 75 companies under the power and energy ministry, the CAB said, all the companies are profitable and have surplus money. The companies invest the surplus money in fixed deposits and then lend from banks to run own operations. The companies make huge profits and have budget deficits at the same time.

Power price is increased to make up for the deficits, the CAB said, adding that turning the PBS into a company would increase its expenses, further raising its deficits.

Deficit is used by the government to justify reduced energy import, increase power price and import electricity. In 2023-24, power import capacity accounted for 9.34 per cent of the installed capacity of 27,824MW. But the actual import of power accounted for 18 per cent of the power consumed in the year.

‘Companies have a long history in this country,’ said Humayun Kabir Bhuiyan, general secretary of the CAB, at the press conference, recalling the exploitative nature of the colonial East India Company.