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Rampal Power Plant

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Rampal Coal-Fired Power Plant
Who gains, who loses?
Moshahida Sultana Ritu

WHO does not know that Bangladesh needs more electricity for its economy to grow? Who does not know that every economic opportunity comes with an environmental cost, be it high or low, visible or less visible? But does this knowledge really leave us with no choice when Bangladesh signs three agreements with India to establish a 1320 megawatt coal- fired power plant in Rampal?

No.

Without answering the question “who pays the cost of environmental degradation and who are the ultimate beneficiaries from building the power plant?” we cannot justify building Rampal power plant.

First, setting up Rampal power plant is not going to ensure our energy security; rather it may aggravate our existing problems. The newly formed joint venture company named Bangladesh India Friendship Power Company (BIFPC), with equal ownership of Bangladesh’s BPDB and India’s NTPC, will be a full-fledged commercial venture. A commercial venture with an objective of cost recovery and profit maximization is not a problem that may lead to project failure. Rather, the problem will be visible elsewhere. The source of finance and ownership will matter the most in this type of project’s sustainability. Initially Bangladesh and India will equally share up to 30 percent equity of this mega project. The remaining equity, which may be equivalent to $ 1.2 billion, will be taken as bank loan with help from the NTPC. Repaying the loan will require quick cost recovery and hence will put an extra pressure on the company to reduce cost. If we consider the lifetime of the project the burden of loan repayment in the initial stage of the project will put additional pressure on the company even before it begins to earn economic profit.

It is agreed that India’s NTPC would take the lead in management and operation of the power

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