* Electricity production increased fourfold between 2011 and 2024, but payments rose more than eleven fold, from $638 million to $7.8 billion
* Review committee observed evidence emerged two former power secretaries involved in the organised corruption.
* Committee chair justice Moinul Islam Chowdhury said "Widespread corruption has been detected.”
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Bangladesh's power sector witnessed a systematic corruption using the "Speedy Supply of Power and Energy (Special Provision) Act" which help the private power companies to receive payments from the government under the inflated pricing agreements, where graft, rather than electricity supply, was the main objective.
"Due to all these anomalies, electricity production increased fourfold between 2011 and 2024, but payments rose more than eleven fold, from $638 million to $7.8 billion. The widespread corruption in the power sector has contributed to rising electricity prices, which are currently 25 per cent higher than in comparable countries. Removing subsidies could push the increase to 40 per cent," the national committee formed to review contracts executed under the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010 observed.
The review committee has submitted its report on Sunday to the adviser of the Power, energy and mineral Resources Division Dr. Mohammad Fouzul Kabir Khan at his office. It will submit its final report in mid-January.
The committee observed that the agreements posed no risk to the businesses, as all risks were borne by the government. It also stated that this was not a case of mere administrative failure arising from incompetence, but rather, corruption was directly involved. Therefore, the contracts could be terminated.
Making comment over the issue, Fouzul Kabir Khan said government will not hesitate to cancel any contract even the contract with Adani if any irregularities or corruption are proven.
'The contracts clearly state that no corruption has occurred, but if proven otherwise, cancellation is possible. Verbal assurances will not be accepted by the courts; there must be proper justification," he added.
"Speedy Supply of Power and Energy (Special Provision) Act" was enacted primarily to facilitate corruption. The sector had witnessed organised corruption. The power purchase agreements served as secure investments for rent extraction. The power plants themselves imported fuel, a process that was also rife with corruption. As the private power plants owners were allowed to purchase fuel directly for their own plans.
The committee observed that the agreements posed no risk to the businesses, they signed the contract with BPDB and the BPDB has taken the all risks. It also stated that this was not a case of mere administrative failure arising from incompetence, but rather, corruption was directly involved. Therefore, the contracts could be terminated.
Committee chair justice Moinul Islam Chowdhury said that the extent to which the contracts can be cancelled will be determined in due course. The contracts in the power sector are highly technical, he noted, which is why the review process has taken time. "Widespread corruption has been detected. The final report will be submitted by mid-January," he added.
The committee observed there was excessive centralisation of power, the ministry was always under the prime minister's control. The amount paid in bills compared to the electricity actually generated is so disproportionate which is extra more than the power production figures.
The report could provide grounds for the Anti-Corruption Commission (ACC) to conduct an inquiry. During the tenure of the previous government, one after another unilateral agreements had been signed under the special provision act. These contracts granted every advantage to business groups without regard for the state's interests. One contract appeared to be a replica of another. From the former Prime Minister's Office to the power agencies, all were involved. Ministry recommendations even contained suggestions such as "there may be no gas, but the agreement should proceed."
However, the review committee observed that the corruption occurred not only in one stage, the entire pre-contract process had been scrutinised. Evidence emerged of the direct intervention of the former prime minister. The Ministry of Power, Energy and Mineral Resources was under her charge. Two former power secretaries, who later served as principal secretaries to the Prime Minister's Office, were found to be involved in the organised corruption. They are Abul Kalam Azad and Ahmad Kaikaus, former Principal Secretaries to Prime Minister.
The "Speedy Supply of Power and Energy (Special Provision) Act", commonly known as the indemnity law, was repealed in November last year. Prior to that, on 5 September last year, the Ministry of Power, Energy and Mineral Resources formed a five-member committee to review the contracts signed under this Act during the tenure of the previous government.
The committee is chaired by retired High Court Division justice Moinul Islam Chowdhury. The other members are BUET professor of the Department of Electrical and Electronic Engineering and pro-vice-chancellor, Abdul Hasib Chowdhury; former chief operating officer (COO) of KPMG Bangladesh, Ali Ashfaq; former lead economist of the World Bank's Bangladesh office, Zahid Hussain; professor of economics at the Faculty of Law and Social Science, University of London, Mustaq Hossain Khan; and senior Supreme Court lawyer Shahdeen Malik.
Mentioning the contract with Adani's power plant, Mustaq Hossain said that irregularities and corruption surrounding Adani's agreement have already been challenged in court through a writ petition. The court has sought a report.
"Within a month or so, strong evidence will come to light. These findings can be used to initiate legal proceedings both domestically and internationally," headed.
The review committee's main recommendations focus on future safeguards to prevent such contracts from being made again. It advised that before entering any contract, a thorough assessment should be conducted by an independent commission, Energy Adviser Fouzul Kabir Khan has said.
Based on the committee's recommendation the "Power Tariff Review Committee" was formed on 21 January to reassess the pricing of electricity. That committee's work is ongoing.
Allegations have been made that special privileges were granted to certain parties through mutual understanding. The previous government exploited the provisions of the special law to award contracts without tender.
It here be mentioned that the Special Provision Act was enacted in 2010 and its tenure was extended repeatedly. Under this Act, no decision taken could be challenged in court. For that reason, it became known as the indemnity law. One contract after another was signed under this Act without tenders.
