Privatization in Power Sector May Lead to More Public Debts and Poverty

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Dhaka, 4th July 2010. Today in an opinion sharing meeting held at press club, organized by different network of rights group criticized government policy that have created space of investment for the private sector, foreign companies in power sector. They mentioned that in view of other Asian country experiences it may create more public debts and increase disparity in society. The meeting was jointly organized by Action Aid, EquityBD, Jubilee South, SUPRO, MFTD, Unnayan Onneshan and VOICE. Ms. Lidy Nacpil of Jubilee South narrated her experience from Philippines, and Sayed Aminul Haque of EquityBD gave analysis on Bangladesh situation in this regard. The meeting was moderated by Rashed Al Titumir of Unnayan Onneshan, while Md. Shamsuddoha of EquityBD, Faruque Ahmed from MFTD and Farjana Akther of VOICE also spoke in the occasion.

Ms. Lidy Nacpil of Jubilee South said that now a day electricity becomes the basic public necessity in development, thus it has become a public right. But the international financial institutions like World Bank and Asian Development Bank pressurized the Philippine and other Asian Governments to leave this sector for private sector investment including to the foreign companies. In this context, government is assuring different guarantees to them, including the guarantee of foreign exchange and power purchase, Thus the rate has commercialized in such a way that the government and the general public has to pay much in this regard, e.g., each one of Pilipino has to pay 40 % more of electricity bills that they are not using. She also mentioned that in fact now it is creating poverty in one hand and in other hand it is creating public debt too.

Sayed Aminul Haque of EquityBD said, so far the Government of Bangladesh gave around US $ 3.13 billion subsidy in electricity and fuel, which could have been invested in public sector for power generation of around 14,000 megawatts. Still government is indebted to the World Bank and ADB around US $ 700 millions which was given for power sector reform, in fact the WB loan has paved the passage of private sector investment and created the present crisis.

In his concluding remark Rashed Al Titumir mentioned that the World Bank review report on public private partnership (PPP) revealed that apart from all the efforts there are only 16 % response from private sector for power generation in India. So, government plan and dependency on PPP for power generation might lead the country to another disaster. He advised the government to launch public bond in this regard. He also mentioned that, in fact it is not the private sector; it is only the public sector is bound to look at the remote rural areas to minimize disparity and inequalities to lead poverty eradication. He urged for total public investment planning in electricity generation sector for people’s right on electricity and all above for “energy sovereignty”.

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