Resolve Coal Levy Crisis……1 Feb 2025 13:10
Https://www.observerbd.com/news/510088
Resolve coal levy crisis for energy security
Published : Saturday, 1 February, 2025 at 12:00 AM Count : 329
The ongoing dispute over the maintenance levy on coal transportation at Payra Port has thrown a wrench into Bangladesh's power sector, jeopardizing electricity production at critical power plants. The disagreement between the National Board of Revenue (NBR) and the Bangladesh Power Development Board (BPDB) has created operational and financial uncertainty, ultimately threatening the stability of the national grid. Without an immediate resolution, the country could face increased electricity costs and potential disruptions to supply, affecting industries and households alike.
At the heart of the issue lies a gazette notification introduced by the Shipping Ministry in December, which imposed a port maintenance fee on imported coal. The move, implemented without consultation with the Power Division, has led to a significant financial burden on power producers. With an estimated annual cost increase of Tk 675 crore for transporting 7 million tonnes of coal, this levy directly contradicts efforts to reduce power production costs, as previously committed to the International Monetary Fund (IMF). Power producers have expressed concerns that the additional costs will ultimately be transferred to consumers, raising electricity tariffs at a time when affordability is already a pressing concern.
The impact is already being felt, with coal unloading operations temporarily halted, delaying the supply chain necessary to keep power plants running. The conditional approval for unloading coal at Payra Port is a temporary reprieve, but unless a permanent resolution is reached, the nation risks major energy disruptions. The financial strain on power plants will continue to escalate, as seen with the 1,320 MW Bangladesh-China Power Company Limited (BCPCL) and the 1,320 MW RPCL-Norinco International Power Limited (RNPL), which have estimated an increase of Tk 360 crore annually in transportation expenses.
Beyond financial concerns, operational inefficiencies at Payra Port exacerbate the problem. Incomplete channel dredging has led to additional expenses, with power companies bearing an extra $7-8 per tonne in transportation costs. The $68 million already spent on dredging from 2019 to 2020 has not resolved the challenges, raising questions about the effectiveness of the port's infrastructure planning and execution. Instead of imposing a blanket levy, a more strategic approach should be taken to optimize port operations and ensure that costs remain manageable for essential industries like power generation.
The immediate priority should be a fair resolution that balances port maintenance needs with the financial sustainability of the power sector. The formation of a committee led by the Finance Division, with representation from all relevant stakeholders, is a step in the right direction. However, swift a
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