This amount of loss is so massive that even if the PDB's systems loss came down to zero from the present level of 22 percent, it would not reach a break- even point.

The PDB incurred about Tk 400 crore loss a year from the late nineties to fiscal 2002-03. The trend continued, and the annual loss exceeded Tk 879 crore in 2005-06.

The loss this fiscal year would have remained close to Tk 800 crore had the government increased power tariff by five percent from July last. But the power ministry's proposal to do so was brushed aside by the then four-party alliance government and last week, by the caretaker government.

"This five percent increase would increase PDB's revenue by Tk 30 crore a month or by Tk 360 crore a year. The PDB would still incur loss but the situation would have been less bleak," commented a power expert.

"The current situation demands that the power price be increased by 26 percent to keep PDB's power business at break-even point. This is an absurd situation and the country cannot afford Tk 1,100 crore loss from the PDB alone every year," he added.

"This is also ridiculous that all other bulk power buyers are enjoying a ride at the cost of the PDB," he pointed out.

The PDB is forced to sell power at a loss-incurring rate to the Rural Electrification Board (REB), Dhaka Electric Supply Company (Desco) and even Dhaka Electric Supply Authority (Desa).

The PDB also gets less priority when the REB, Desco or Desa make their monthly payments for power purchase. Before the PDB gets paid, the Power Grid Company of Bangladesh (PGCB) gets payment for power distribution.

Having been brainchildren of the Asian Development Bank (ADB) or the World Bank (WB), the REB, Desco, Desa and the PGCB are given higher priority in maintaining financial disciplines. That way the REB, Desco and the PGCB are shown as 'successful' ventures at the donors' efforts.

But the WB has also been hammering the government on increasing the power tariff, which the government ignored since 2003 and let the PDB's loss grow bigger and bigger.

The government did so to 'stay popular' with the general people, who are otherwise angered by its failure to increase power generation in the last five years.

"The fact is everything has become costly around the world for the last few years. But in case of the PDB, its power sales rate keeps on falling for the convenience of everyone else. It seems that there is no government for the PDB," a frustrated official commented.

There are more than 70 lakh power customers across the country with the peak demand for power exceeding 5,200 megawatt (MW) against a maximum supply of 3,300 MW last year.

PDB'S DECLINING POWER SALES TARIFF
The PDB's earning rate from power sales is decreasing incrementally. On an average, the PDB now purchases power at Tk 2.53 per kilowatt hour (per unit) and sells it at Tk 2.15.

In 05-06, the PDB earned Tk 2.27 per unit by selling power and Tk 2.41 in the previous fiscal year.

It sells 80 percent of its power to the Desa, Desco, REB, and the Western Zone or Westzone at a rate much lower than its average price.

For instance, the REB buys power at Tk 1.94 a unit and sells it around Tk 3 to rural customers. In addition, in the last fiscal, the PDB handed over huge distribution lines to REB. Some of these included PDB's profitable zones.

The Desa, which is the biggest consumer, and is mainly responsible for the loss making spectacle where power thieves take away nearly one fourth of the sales, pays the PDB Tk 1.88 per unit. The Desa however pays another Tk 0.23 per unit to the PGCB as transmission fee.

The PDB sells the remaining 20 percent of the total power to its own customers at a much better rate. But this share is too little to improve the PDB's financial condition.

Only a few years back, the PDB's average power purchase cost Tk 2.15 per unit while the sale price was around Tk 2.4. Back then, systems loss had been the major cause of the PDB's loss.

DEALING WITH THE IPPS
In addition to incurring losses, the PDB is contract-bound to make payments to independent power plants (IPPs) or for private power in foreign currency. Often the PDB is seen running into severe liquidity crisis in making these payments.

The cost of IPP power had been largely very friendly for the PDB but the lack of PDB's power sales price adjustments in the recent years is now taking its toll.

The PDB paid a total of Tk 1,707 crore in 2004-05 and Tk 1,934 crore in 2005-06 to IPPs.

The IPPS in 2005-06 supplied over 36 percent of the total electricity distributed across the country. The country produced 2,2741 gigawatt hour power during this time in which the IPPs supplied 8,286 gWh.

Of all the IPPs, the Meghnaghat and the Haripur AES plants -- 450MW and 360 MW -- have kept the sinking PDB afloat for a few years.

While the PDB swallows heavy losses from all private and public power plants due to inconsistent government policies, power from both Meghnaghat and Haripur plants remain the least costly.

The average cost of Meghanaght power was Tk 1.46 a unit in 2004-05 and Tk 1.59 in 05-06, Haripur Tk 1. 25 in 2004-05 and Tk 1.33 in 05-06. The price remains low because of the original deals, and size and location of the plants although the deals demand payment in dollars.

In contrast, other IPPs which were conceived and pushed by the Awami League government have remained unkind to the PDB.

Two Mymensingh 70 MW simple cycle gas-fired units under the Rural Power Company (RPCL) charged Tk 3.51 a unit in 2005-06. The RPCL is owned by the government's Rural Electrification Board (REB) and several palli bidyut samities, and is not a typical privately owned company.

The NEPC 90 MW gas fired barge-mount plant charged Tk 3.63 a unit in 2005-06, Westmont 90 MW gas-fired barge-mount plant charged Tk 3.68 a unit during the same period and Khulna 110 MW oil-fired plant Tk 8.49 a unit.

"Of them, Khulna unit is costly because it uses imported oil. Oil price has gone up from $90 a tonne to $300 in two years. The NEPC and Westmont deals demand payment in dollars, and the high dollar rate has contributed to this price hike," one source pointed out. "Besides, small power deals always put up comparatively high prices."