Millennium Post

Remembering eastern promises

India started supplying power to Bangladesh from the 5th of this month. A 98-km dedicated transmission line has been set up between Baharampur in Murshidabad district of West Bengal and Bheramara in Bangladesh. Initially 250 MW of power will be supplied. By the end of the year it is expected to be stepped up to 500 MW. But there is a provision in the Indo-Bangladesh agreement on power to expand the capacity of this grid substation to 1000 MW.

 Indian power supply has come at a critical period when power has become a major constraint for the growing economy of Bangladesh. According to official figures, Bangladesh’s power generation now hovers around 6000 MW against the estimated demand of 7500 MW. Thus there is a shortfall of 1500 MW. But actual shortfall is believed to be much higher, over 2000 MW. The power crisis is so severe that the Bangladesh government has been forced to enter into contractual agreements for high-cost temporary solutions like hiring diesel-based generators from private owners at a high rental, pushing up generation cost.

Bangladesh is trying desperately to switch over from the traditional gas-based power, which now accounts for as much as 89.21 per cent of total generation, to other sources like coal-based and nuclear power. Prime minister Sheikh Hasina laid the foundation stone of the country’s first nuclear power plant at Rooppur in Pabna district, 200 km north-west of Dhaka, on October 2. Two reactors of 1000 MWe each are being built at a cost of $4 billion by the Russian nuclear company Rosatom. The country aims at a massive increase of power generation to 20,000 MW by 2021, that is, in just eight years from now.

The country is now giving emphasis on developing renewable sources of energy, especially solar power. Today, about 15 lakh rural families are lighting up their homes with solar energy generated by PV panels supplied mostly by China. This is one field which offers scope for fruitful Indo-Bangladesh cooperation. The Asian Development Bank (ADB) is extending a $300 million loan to Bangladesh to develop its energy infrastructure to overcome critical power shortages which are impeding economic growth in general and the poverty alleviation programme in particular.

Bangladesh has one of the lowest per capita power consumption in the world – 136KwH. More than half of its 16 crore population does not have access to electricity. There is a wide gap between generation capacity and actual power availability due to low efficiency of the plants (indicated by the plant load factor or PLF), erratic power supply, pilferage, high line loss in transmission and shortage of funds for maintenance of the power plants. The generation capacity of the power stations also varies widely – from 950 MW of Ghorasal to a mere 40 MW of Barisal.

Bangladesh economy is still a predominantly agrarian economy. The existing industries are mostly consumer industries like the booming ready-made garment manufacturing sector which now accounts for more than 75 per cent of the total export earnings. Other industries include processing and exporting of beef, shrimp etc. But lately, Bangladesh has been making efforts at building up its industrial manufacturing sector. Japan has offered to manufacture automobiles in Bangladesh. India can extend its helping hand in developing and diversifying the industrial sector.

The future of Indo-Bangla relations and the scope of mutual cooperation, however, will depend largely on the outcome of the general elections scheduled for early next year. If the 14-party alliance led by Awami League is voted back to power the possibility of Indo-Bangla cooperation will increase.

But India will also have to resolve some contentious issues like sharing Teesta waters, exchanging enclaves in each other’s territories and changing the lop-sided nature of Indo-Bangla trade, with Indian exports far outstripping imports from Bangladesh. For example, in 2011-12, India’s exports to Bangladesh were valued at $4743.3 million, while imports from Bangladesh were just $498.4 million. This has been a sore point with Bangladesh. The possibility of arriving at a bilateral Free Trade Agreement (FTA) by the two countries has been discussed from time to time but does not seem to have been examined seriously.

India has to bear it in mind constantly that China is trying to widen and deepen its footprint in Bangladesh in every way possible. Trade between the two countries crossed the $8- billion mark in 2012 and in the first five months of the current year it has already reached $4.2 billion. In 2002, Bangladesh signed a Defence Cooperation Agreement with China. Beijing now admits that Bangladesh is a major buyer of Chinese weapons. The Bangladesh army has Chinese tanks, its navy has Chinese frigates and missile boats and its air force has Chinese fighter jets. Both India and China are fighting a silent diplomatic war for winning over Bangladesh.
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