The Payra Port Authority has given conditional approval for unloading 56,614 metric tonnes (MT) of coal for the newly installed 1320MW RPCL-Norinco Intl Power Ltd.
On Sunday, the port authorities temporarily halted the unloading process because the plant authorities disagreed to pay an imposed maintenance fee of USD $7.71 per metric tonne.
The coal, imported from Indonesia via a Panama-flagged bulk carrier, was intended to fuel the newly installed power plant. However, the process was delayed for over a day due to a dispute over the port maintenance fees between the Ministry of Shipping and the Power Division.
“We are getting conditional clearance to unload 56,614 MT of imported coal that arrived on Sunday,” said RPCL-Norinco Intl Power Ltd Managing Director Salim Bhuiyan to Just Energy News on Monday.
He explained that the port authority is charging USD $7.71 per MT as a port maintenance cost or levy. “The power plant will be required to pay Tk 360 crore annually if the ministries do not resolve the issue through an inter-ministerial meeting,” he stated.
Bhuiyan expressed concern that this would increase the production cost of electricity by more than Tk 0.50 per unit.
The RPCL-Norinco Intl Power Ltd plans to synchronize the power plant next week, according to the managing director. The plant is projected to require the import of up to 72 ships of coal annually, incurring an additional Tk 360 crore per year in maintenance fees.
“We have no problem paying the maintenance charge, but we also have to bear an additional $7-8 per metric tonne of coal due to the lack of channel dredging,” he said.
Currently, the per-unit tariff for electricity production is set at Tk 10. “This tariff may rise to Tk 10.50 after accounting for the port maintenance cost,” he noted with disappointment.
An official of the Power Division stated that payment issues are typically handled through book transfers between government entities. However, the new port costs may increase the overall electricity tariff, potentially burdening end consumers.
“The coal-loaded ship will receive a no-objection certificate (NoC) after the maintenance fees are paid,” said Payra Port Authority’s Member Harbour, Captain Mohammed Jahidul Islam, to Just Energy News.
He added, “I have already instructed the shipping agent to make the payment and release the goods. The Payra Port Authority is operating in accordance with the rules and regulations.”
RPCL-Norinco’s Letter to PPA
RPCL-Norinco Intl Power Limited issued a formal letter to the Chairman of the Payra Port Authority (PPA) last Sunday, urging immediate action to release the coal. The company emphasized the importance of maintaining payment compliance as stipulated in agreements to ensure stable and reliable power production. It warned that failure to address the issue promptly could lead to operational challenges and service interruptions.
In a letter dated January 13, 2025, the PPA informed RPCL-Norinco Intl Power Limited that the port maintenance fee of $7.71 per metric tonne was fixed through a gazette notification on May 13, 2024, and is considered a settled issue.
In recent communication dated January 10, 2025, the PPA identified unpaid dues and charges, which it stated violated the provisions of the project agreement. In a response dated January 12, 2025, RPCL-Norinco Intl Power Ltd acknowledged the situation and proposed a discussion to address the matter through an inter-ministerial meeting with top policymakers.
The PPA has urged immediate attention to these discrepancies and called for the company to settle its dues promptly to maintain operational compliance.
How to Release the Coal
The coal was unloaded through telephonic communication between the shipping and Power Division secretaries.
Earlier, the Chittagong Port Authority (CPA) demanded Tk 400 crore from the Matarbari 1,200 MW coal-fired ultra-supercritical power plant without prior approval from the Power Division.
“We have begun trial electricity generation at the Tk 51,854.88 crore JICA-funded plant since July 2024,” said Md Nazmul Haque, Managing Director of the state-owned Coal Power Generation Company Bangladesh Ltd (CPGCBL).
The Power Division faces rising electricity generation costs due to levies imposed without consultation, including a $7.71 per tonne charge by the Payra Port Authority. The latest demand from Payra adds to these challenges.
“Our generation cost has risen by Tk 0.51 per kilowatt-hour, reaching Tk 6.50 per kilowatt-hour. With the new levy, this will increase to Tk 7.01 per kilowatt-hour,” said Engr AM Khurshedul Alam, Managing Director of Bangladesh-China Power Company Ltd. He estimated an additional $30.84 million annual expense to import 4 million tonnes of coal under the revised levy.
The Power Division has sought concessions from the International Monetary Fund (IMF) on electricity tariff reviews for three years. Officials warn that shipping ministry levies, including those at Payra and Matarbari ports, exacerbate the sector’s financial strain.
Stakeholders have urged the Shipping Ministry to reconsider levies and improve coordination to manage costs and ensure reliable coal supplies for power generation.
Impact on the Power Sector
The levy is also impacting the 1,320 MW Payra coal-fired power plant and other similar facilities, significantly increasing electricity production costs. Collectively, these plants, with a total capacity of 2,640 MW, are critical to Bangladesh’s energy supply.
The Bangladesh Power Development Board (BPDB), already burdened with unpaid bills amounting to Tk 30,000 crore, has raised concerns that the levy will worsen its financial challenges.
An official noted that the levy jeopardizes recent commitments made to the International Monetary Fund (IMF) to reduce power sector subsidies through cost-saving measures.
Dispute Over Levy Calculation
The Bangladesh-China Power Company previously engaged Belgian dredging firm Jan De Nul to assess an appropriate levy, which was proposed at $3.46 per tonne based on a 7-metre port draft. However, the Payra Port Authority set the levy at more than double this rate.
The port’s draft has reportedly decreased to 6.5 metres due to siltation, with further reductions threatening coal supply logistics. “If the draft falls below 6.5 metres, mother vessels will be unable to dock, necessitating 100% lighterage operations and significantly increasing coal handling costs,” warned Engr AM Khurshedul Alam, Managing Director of Bangladesh-China Power Company Ltd.
The Payra Port Authority has demanded Tk 839.65 crore in unpaid levies for the period from January 2021 to November 2023. Bangladesh-China Power Company had previously invested $68 million between 2019 and 2020 to dredge the channel, ensuring a 6.3-metre draft for coal shipments.
Despite this investment, rapid siltation has reduced the channel’s navigability, adversely affecting coal supply efficiency. The port plans to purchase two dredgers to maintain the channel at Rabnabad Point, according to Senior Shipping Secretary Mohammed Yusuf.
BPDB Chairman Rezaul Karim stated that the authority is prepared to proceed if the Payra Port Authority ensures dredging to maintain a draft exceeding 9 metres in the channel.
