BPDB finds Tk 4,100cr discrepancies in Rampal, Payra financial accounts
Major joint venture power plants allegedly exaggerating their bills all the way, from manipulating invoices to misinterpreting deals, offers a glimpse into power sector ill practices.
Bangladesh Power Development Board spotted nearly a dozen discrepancies involving Tk 4,125 crore in the financial accounts of two major power producers, coal-based Payra and Rampal power plants, each having the installed generation capacity of 1,320MW.
The BPDB’s assessment has revealed Tk 2,478 crore mismatches in the audited financial report of the Rampal power plant, a joint venture between the BPDB and Indian state-owned National Thermal Power Corporation, for the year of 2023–24.
The Payra power plant, a joint venture between the Bangladeshi state-owned North-West Power Generation Company Limited and Chinese state-owned company China National Machinery Import & Export Corporation, on the other hand, submitted bills for the period between May 2020 and June 2023, inflating the amount by Tk 1,534 crore, a BPDB assessment of the Payra plant’s financial accounts revealed.
‘The cost of the joint ventures, theoretically, should be equally divided among the involved parties,’ said ANM Obaidullah, a BPDB member in charge of company affairs.
He, however, refused to comment on any of the particular joint ventures, saying that he was newly appointed and so lacked in-depth knowledge.
He promised a thorough review of the matter.
The power plants trying to charge excessive bills came to light through BPDB reports prepared in September and November last year, immediately after the authoritarian regime of Awami League was overthrown in an uprising led by students.
Rarely there had been an objective evaluation of the power plants’ financial dealings during the 15-year tenure of AL’s regime, which built 124 power plants, all without tender.
Energy experts said that the findings indicated the root of the power sector’s financial scam ran deep, even more so among privately-owned power plants that enjoyed free rein to do what they liked during the AL regime.
Total 87 privately-owned and two joint venture power plants were built during the AL regime which saw the state-owned BPDB get buried under losses with the overall loss exceeding Tk 86,000 crore.
The BPDB notified the Bangladesh-India Friendship Power Company Limited, the owning company of Rampal, in a letter dated November 21, 2024 about eight discrepancies in its 2023–24 financial account.
‘As a joint venture partner and off-taker, it is essential to resolve these matters to ensure mutual understanding and transparency,’ read a line of the letter.
The BPDB’s assessment has also shown that Rampal’s overbilling included nearly Tk 886 crore of mismatches in the account of energy payment, followed by over Tk 563 crore mismatches in the account of the return on equity.
The calculations of the interests on debt and working capital were exaggerated by Tk 358 crore each, operation and maintenance by Tk 343 crore, depreciation by Tk 212 crore, land lease and pre-commissioning expense of the Unit 2 by more than Tk 2 crore each. Rampal raised an invoice of Tk 7,024 crore.
The bills were often not supported with documentation, prompting the BPDB to demand clarification and discussion on a list of 10 points.
In one of the points, the BPDB demanded that any revenue from the sale of coal by-products ‘should rightfully be credited’ to it for it pays for the coal.
Rampal, however, showed proceeds from the sale of coal by-products such as fly ash and gypsum as its income – almost 2 crore in 2024.
In its financial report, Rampal gave an account of Tk 25.89 crore as maintenance cost without providing any breakdown. Rampal also charged Tk 10 crore as consultancy fees, prompting the BPDB to demand a clarification.
The BPDB also raised question about Tk 1,668 crore mentioned as accounts payable for capital expenditure, wondering why such a large amount of capital machinery liability existed when there should have been a warranty period in place.
Rampal’s deputy general manager Anwarul Azim did not answer phone calls despite repeated attempts.
Bangladesh-China Power Company, the mother company of the Payra power plant, on the other hand, submitted an audited account of Tk 21,866 crore in capacity and energy payment for three years since the power plant’s initial operation began on May 15, 2020.
The company demanded over Tk 7,522 crore in capacity payment, which the BPDB found exaggerated by more than Tk 1,333 crore.
Citing power purchase agreement amendment, the BPDB noted that the company was not entitled to full capacity charge because the original PPA was not in full force until December 16, 2022, until the evacuation facility was complete.
The BPDB also refused to pay capacity charge for the month of June in 2023 when the plant’s availability factor was 16.41 per cent, far less than the required capacity factor of 85 per cent. Payra, however, claimed 100 per cent availability for the month, on the ground that it remained out of operation because of dollar crisis and the BPDB failed to make timely payment. The Bangladesh-China Power Company accepted the BPDB’s decision.
In the energy payment, the BPDB found over invoicing in coal landing cost in 10 shipments.
In two other shipments, the BPDB said that Payra claimed demurrage parts of which were supposed to be covered by the coal supplier.
The other reason for changing the landing cost was the company using different exchange rates.
The Payra plant also billed the BPDB for combustion inspection, service engineering, spare parts and training, which the BPDB noted should have been in the warranty period.
The BPDB and Payra authorities sat five times in 2024 to settle the issues.
‘We are transparent and there is no scope for making excessive bills as they are always verified,’ said Shah Abdul Moula, plant manager, Payra power plant.
