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The government has decided to review agreements made in the energy sector under a special provision passed during the tenure of the Awami League government in 2010. The law is known as the ‘Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010’. It facilitated the implementation of several mega projects, with some still ongoing. The interim government has now opted to reassess the agreements executed under this law.

A five-member national committee has been formed under the leadership of retired High Court Division Justice Moinul Islam Chowdhury to carry out this review. Yesterday (Thursday, September 5), the Ministry of Power, Energy, and Mineral Resources issued a notification regarding the committee’s formation. Following this, the ministry also sent out a press release outlining the details.

According to the press release, Justice Moinul Islam Chowdhury has been appointed as the convener of the national committee. The other four members are Professor Abdul Hasib Chowdhury from the Electrical and Electronic Engineering Department at BUET, former COO of KPMG Bangladesh Ali Ashraf, former World Bank Lead Economist Dr. Zahid Hussain, and Professor Mushtaq Husain Khan from the Faculty of Law and Social Sciences at the University of London.

The ministry outlined that the national committee would be able to gather data from any source and audit any necessary documents. It will also have the authority to summon individuals or organizations for hearings. The committee will review whether the agreements made under the 2010 Quick Enhancement of Electricity and Energy Supply Act (amended in 2021) safeguarded the government’s interests. Based on the audit findings, it will formulate recommendations for future actions. The Ministry of Power, Energy, and Mineral Resources will provide secretarial and logistical support to the committee.

A committee member, speaking on condition of anonymity, told Bonik Barta, “The committee has just been formed. The members will meet to discuss the scope of work. And then it would be possible to determine whether there are any specific instructions from the government. It’s too early to provide any further details at this stage.”

The special provision was initially introduced to address the country’s energy crisis, but it has faced strong criticism since its inception. Although it was initially meant to last two years, its tenure has been extended three times, now set to expire in 2026. The provision leaves no room for legal challenges regarding procurement or infrastructure development in the energy sector. This has led many to label it as the ‘Indemnity Law’ for the energy sector.

There are allegations that several unfair agreements were made under this law, benefiting individuals linked to the Awami League government and those in close proximity to power. While these individuals reportedly profited significantly, the country’s power and energy sectors have suffered losses. Due to the protections provided by the law, no one has been held accountable so far.

Experts have welcomed the formation of a national committee to review contracts undertaken in the energy sector under this special law. According to them, this decision is timely, as the public has the right to know what these agreements entail.

Energy expert and former BUET professor Ijaz Hossain told Bonik Barta, “The government’s initiative to review these contracts is certainly a positive step. Without this, we wouldn’t truly understand what these agreements involved.”

According to data from Power Cell, an electricity policy and research organization, Bangladesh currently has 152 power plants. Of these, 125 were constructed during the Awami League’s tenure from 2009 to 2024. Among them, 91 plants were built under the special law.

It was under this law that in 2010, the country approved quick rental power plants on a large scale. These plants, initially intended for three to five years, have been operational for 10 to 15 years. Over the past decade and a half, private sector power projects have been awarded without any competition, under this law. While the country’s power generation capacity has increased, the Bangladesh Power Development Board (BPDB) has suffered severe financial losses year after year.

A research report by the Bangladesh Institute of Development Studies (BIDS) on the power sector, published in August 2022, revealed that the state incurs an annual financial loss of nearly $1 billion due to purchasing electricity at inflated prices from private power producers.

The study, based on a review of electricity purchased from 58 private power plants between 2004 and 2017, further noted that costs have skyrocketed because agreements were not made competitively with certain private power plants. The price of electricity increased by 15 percent solely due to the provision of government land leases to these plants. Additionally, under contracts with expensive rental power plants, the government must pay a capacity charge for 60 percent of their production capability, even if they are not generating electricity. This setup allows the plants to make higher profits without producing power.

Various projects, including the construction of LNG terminals, gas well drilling, pipeline construction, and equipment procurement, have been implemented in the energy sector under the special law. However, the exact number of such projects remains unknown. Among them are 46 gas well drilling projects. Allegations suggest that some of these projects were awarded to Chinese and Russian companies at inflated prices.

The interim government, upon taking office, suspended all ongoing activities under the ‘Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 (Amended 2021)’ on August 18. Through an ordinance, the section 34(Ka) of BERC Act was repealed, restoring Bangladesh Energy Regulatory Commission’s (BERC) authority to set gas and electricity prices through public hearings.