The Bangladesh Export Processing Zones Authority (BEPZA) has come under critcism for favouring electricity from United Group’s captive power plants despite higher costs, allegedly to secure a 10% service charge.
Officials warn that the move could undermine the competitiveness of both local and foreign garment factories operating in the zones.
A Japanese factory in one of the export processing zones recently questioned United Group’s electricity rates, priced at Tk11.99 per kilowatt hour, compared to grid electricity at Tk10.88 per unit.
Despite such concerns, BEPZA continues to back United Group’s captive supply for conversion into Independent Power Producer (IPP) status.
At a meeting held on Monday at the Chief Adviser’s Office, chaired by Director General-1 Dr. Ahmed Ullah, officials from the Power and Energy Divisions opposed the current tariff structure, including gas prices charged at IPP rates for United Group’s captive plants.
“We have requested permission to install a transformer costing Tk87 crore to ensure uninterrupted power supply to Chattogram Export Processing Zone (CEPZ),” said one participant. “The Power Division can deliver reliable grid power within a month at a lower cost than United Group’s captive supply, which would strengthen competitiveness for investors.”
Officials from the Energy and Mineral Resources Division (EMRD) also expressed concerns over gas pricing. BEPZA had proposed Tk10.50 per cubic meter for gas supplied to United Group’s captive plants in the EPZs, while imported gas costs Tk75 per cubic meter.
“There is no captive category allowing gas supply at such a low rate,” one official noted, emphasising that subsidies should only apply to electricity generation.
Earlier, on August 10, the Chief Adviser’s Office, chaired by Secretary M. Saifullah Panna, held discussions on granting IPP licenses for power plants in Dhaka, Chattogram, Karnaphuli, Adamjee, Comilla, and Ishwardi EPZs.
EMRD Secretary Mohammad Saiful Islam and Power Secretary Farzana Momtaz attended, raising questions about the costs of electricity and gas for captive plants, particularly those owned by United Group.
The Bangladesh Energy Regulatory Commission (BERC) has already rejected United Group’s appeal to convert its captive plants at Dhaka and Chattogram EPZs into IPPs.
Courts have also ordered the company to settle outstanding gas bills at captive rates. So far, United Group has reportedly paid only Tk50 crore to Titas Gas Transmission and Distribution Company Limited, according to the company’s managing director.