Staff profit sharing27 Aug 2025 07:02
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Profit sharing by state-owned power companies amid subsidies
Mohiuddin Dhaka
Published: 27 Aug 2025, 03: 59
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Electric pylons
Electric pylonsFile photo
The power generation sector has been incurring losses year after year. Every year, government subsidies for this sector increase, with a record Tk 620 billion (62,000 crore) subsidy provided in the last fiscal year. Yet, state-owned power generation companies continue to make regular profits.
The government calls this “artificial profit”. To stop it, the Power Division issued a directive last September. However, company officials and employees still shared profits among themselves.
As per the contracts, the Bangladesh Power Development Board (BPDB) purchases electricity generated from all state-owned and private power plants. BPDB then sells it to six distribution companies at rates set by the Bangladesh Energy Regulatory Commission (BERC).
On average, BPDB spends over Tk 11 per unit of electricity purchased but sells it at Tk 7.04 per unit, resulting in losses that are reimbursed by the government as subsidies.
There are six state-owned companies in power generation, six in distribution, and one in transmission. Their salary structures are significantly higher than the government pay scale. Officials and employees receive benefits including provident fund, gratuity, annual leave, group insurance, and annual salary increments. On top of that, they share company profits every year as a “profit bonus”.
Industry insiders say the profits of these power plants do not depend on workforce efficiency or electricity generation. A plant can make profits for the whole year even without producing electricity.
PDB pays a fixed capacity charge to the plant under power purchase agreements, whether or not electricity is generated. Hence, there is no logical basis for such “profit bonuses”.
Although registered under company law, these companies are direct or indirect beneficiaries of government subsidies. Without these subsidies, they would never be profitable.
Showing them as profitable and distributing profits is therefore unrealistic. Profit and loss calculations should consider government subsidies.
According to labour law, 5 per cent of company profits are deposited into the Workers’ Profit Participation Fund (WPPF). Of this, 80 per cent goes to the participation fund, and 10 per cent each to the welfare fund and the Workers’ Welfare Foundation. Two-thirds of the participation fund is shared equally among officers and employees each year, while the rest goes to their retirement fund.
Labour law mandates profit sharing within nine months of the previous fiscal year. As a result, each officer and employee receives several lakh taka annually.
Profit sharing
To cover cost deficits, successive governments have raised electricity prices 12 times at the wholesale level and 14 times at the retail level o
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