Can the government handle Payra and Rooppur power plants with financial convenience?

 
'Development' has become a political phenomenon in Bangladesh. Instead of investing massive grants in intangible human development elements, quality life, mass transportation, respectful employment, universal health coverage, quality education, universal pension, unemployment benefit and other meaningful social safety allowances, the government mostly focuses on tangible aspects that are visible to the naked eye.

From the government's point of view, mega projects such as Karnaphuli Tunnel, Payra Port, Rooppur Nuclear Power Plant, Payra Power Plant, Matarbari Deep Sea Port, Moheshkhali thermal plant and oil depot, Rampal thermal power station, Dhaka Metro Rail, etc would bring about high GDP growth.

But are the megaprojects of Bangladesh going to pay off their promised benefits and economic utilities over time? To what extent are these development projects going to improve people's lives?

The current 'development' model cannot account for the growing wealth inequality in Bangladesh. It does not relate to ordinary people's suffering behind the TCB grocery trucks, continuous energy, and commodity price hikes, the declining working environment, growing job risk, and poor wages in the private and informal job market, which is 87% of the total labour market. That is, the promises of the megaproject-based development narratives are yet to be fulfilled as reflected in the living standards of the ordinary people.

Rooppur Nuclear Power Plant (RNPP) is Bangladesh's largest infrastructure project to date. According to the original plan, the power plant was supposed to start generating 1,200 MW of electricity in 2021, 2,400 MW by 2022, and 4,000 MW by 2030. In reality, the first reactor has been installed. But as of now, no electricity transmission line has been designed or built yet. So, even if the reactor gets ready it will not be able to move into production, the government will have to pay capacity charges against the idle plant.

The same thing happened in the recently inaugurated thermal power plant Rampal, which in its rights was a widely controversial project. On top of that, the government is having to pay expensive capacity charges as the transmission line for the project is not yet ready for full capacity.   

Moreover, the construction cost of the RNPP has been estimated at Tk1,13,000 crore. Russia is providing 90% of this money as loan assistance. In the wake of the Ukraine war, there are rising concerns about the project's production and operation capability, as the Russian financial system has been sanctioned.

There is widespread ambiguity about its ultra-high-cost model as opposed to international cost standards of similar projects running in India and Indonesia. Intellectuals are also puzzled by the ambiguity of nuclear waste management. 

Bangladesh has not yet gathered any operations and maintenance experience of the nuclear power plant so far. Yet the government is planning to set up another nuclear power plant on the south coast, right next to the Sundarbans. Building a nuclear power plant in an area, where cyclones and catastrophic tidal surges like Aila and SIDR took place, is like playing with fire. Currently, the electricity generation capacity in Bangladesh stands at 25,000 MW. But we can only transmit a maximum of 14,000 MW. On top of that, Bangladesh is still purchasing a few thousand MW of cross-border electricity from India.

Then there are environmental concerns. Bangladesh is yet to reach the 5% mark of non-nuclear green electricity production. Despite growing global concern regarding climate change, the construction of many private and public coal-fired power plants is currently underway.

The government has extended five unnecessary rentals and quick rentals that have not produced electricity for over a year. Over the past 12 years, the Bangladesh Power Development Board (BPDB) has paid Tk76,287 crores in electricity generation. In FY 2020-21 alone, purchasing electricity from the rental power plants cost BPDB approximately Tk3,338 crores.

The issue is this public expenditure is not paying off the promised economic utilities. And that's the reason we do not see the reflection of the development narratives into the common people's livelihood improvement and employment. 

There are some other mega projects like Karnaphuli Tunnel, CTG-Cox's Bazar-Ghundhum railway, Mawa-Payra railway, Matarbari deep seaport, Moheshkhali power plant and oil refinery, Payra power plant, Chittagong bay port, Dhaka Airport terminal expansion. There are plans to build five metro rail routes, including a BRT in the capital Dhaka, by 2035.

13 years from now, when all the metrorail routes will be launched, only 17% of the transportation pressure will be handled. The traffic jam situation is not being solved completely by the metro, the reason is that Dhaka development is not integrated with the decentralisation of the administration and economy.

Many of the megaprojects like Dhaka Airport expansion, projects expanding the highways to four lanes as well as the Chattogram bay port are highly necessary and due on time. Yet in the mix, we have quite some highly expensive but nonproductive foreign loan-based projects too.

Bangladesh Bank's total public and private outstanding foreign loans are $90.7 billion as of Dec 2021. Hence, Bangladesh should be concerned about projects that do not generate fair revenue on time.

At the end of the day, it's the public money and the remittance from which the government has to pay the interest premiums. Projects that cost double yet do not get ready on time are always a burden. We must integrate megaprojects with utmost cost-benefit feasibility.

The government and the bureaucracy must be capable enough and be efficient in quality and timely implementation. Otherwise, the mega project-based development narrative will not create as much timely economic utility and employment opportunity as it promises. But wealth inequality will surely be raised, and debt service payment issues will intensify when the grace period of all the foreign currency funded megaprojects comes to an end.