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Monday, August 30, 2010
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MoU with India today on coal fired power plant in Khulna

Bangladesh Power Development Board (BPDB) will sign a memorandum of understanding (MoU) with the Indian National Thermal Power Company (NTPC) today for cooperation in the power sector between the two countries and to set up a 1,320 megawatt coal-fired power plant in Khulna.

A competent source of the PDB told The Daily Star that a four-member Bangladesh team led by PDB Chairman Alamgir Kabir is now on a visit to Delhi to sign the deal that came as a follow up of several initial agreements reached during Prime Minister Sheikh Hasina's visit to India back in January.

Under the MoU between the two national companies, the large coal fired power plant will be set up under equal partnership. A joint venture agreement for the coal plant will be signed later and a board will be formed comprising equal members from both the countries. The chairman and the managing director's position will be periodically rotated between the two nations to maintain equality.

The MoU also outlines the fundamental areas of power sector cooperation. These includes NTPC's assistance in developing human resources in Bangladeshi power sector, improvement of efficiency and the scope to go for more joint ventures by the two state companies in power projects in both India and Bangladesh in the future.

“Such future ventures could mean joint ventures in hydro power or renewables,” said a top PDB official.

The MoU will be signed this morning in presence of the Bangladesh high commissioner and counselor, Indian foreign secretary and high officials of NTPC.

Sources said that India earlier had some reservations on Bangladesh's proposals in the draft MoU. In May, India had sent Bangladesh a draft agreement outlining that the NTPC would manage and finance the two-unit coal-based plant in Khulna that would be jointly built with the PDB. Under this joint venture, the board of directors will be headed by Bangladesh. The number of NTPC representatives will be higher than those of Bangladesh by one.

In June, a high-powered committee headed by adviser to prime minister on economic affairs Dr Mashiur Rahman reviewed the Indian proposal and decided to suggest that the Bangladeshi share in this plant should increase gradually.

As part of cooperation between the two countries, the NTPC is already conducting a feasibility study for the coal-fired plant while the PDB has acquired land in Khulna and Chittagong to build a couple of large imported coal-based power projects.

The PDB is already acquiring 1,800 acres opposite to the Chalna port in Khulna for the joint venture with India.

It is planned that the Khulna plant would use high-quality coal imported through the sea from countries like Indonesia or Australia. The government is not considering import of Indian coal as it is generally low in quality and comparatively more environmentally harmful.

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