Thursday, 2 February, 2023

Work on power projects stalled for Energypac’s fund crisis

A series of power substation projects under the Power Division have stalled as the country’s local power transformer producer Energypac is facing a massive fund crisis.

The under-construction power projects involve a total cost of over Tk 10 billion.

The company’s fund crisis was exposed during a review of the under-construction sub-stations of Ghorashal Power Project.

State Minister for Power, Energy and Minerral Resources Nasrul Hamid visited the Ghorashal power hub on Monday.

The issue was communicated to him by the company's officials during the visit. The company said they had failed to avail a loan from a local bank.

“We are not even going to get an $8 million loan from a local bank even after trying for it for the last three months,” the company consultant Engr Md Haroon ur Rashid explained to the minister.

He said a consignment of copper materials of the project was also stolen three months back from Ghorashal power hub.

State Minister Nasrul Hamid, however, instructed the company to give up the projects or assign partnership to complete the projects timely.

He said the company might be blacklisted anytime if it made further delays with the projects.

Bangladesh Power Development Board (BPDB) chairman Mahbubur Rahman and Power Grid Company of Bangladesh Golam Kibria accompanied the state minister at the Ghorashal power hub visit.        

According to Energypac, they are assigned to supply 14 transformers to Ghorashal Power hub. But they have so far supplied only six and another three under processing despite the expiration of the tenure.

Besides, the supply of transformers to PGCB and the Bangladesh Rural Electrification Board (BREB) is also in the same condition.

EnergyPac officials informed the minister of delaying the projects due to the hike of copper iron over 120 percent due to Covid-19 and Russia-Ukraine war.

They also requested him to review the tariff of the projects.

In response, State Minister for Power and Energy Nasrul Hamid wanted to know why they had delayed the projects.

He asked them to arrange partners to complete the rest of the projects’ work before the next summer.

Frustrated with the delay, the state minister told the officials, “Power projects were delayed because of your faults.”

He asked the Power Division to hold a meeting to review the projects.

According to sources, Energypac has already delayed payment of staff salaries due to its weak financial condition.

Speaking about the delay of the projects and financial conditions in Energypac, managing director Humayun Rashid said the PGCB and BPDB owe over Tk 7 billion to Energypac as outstanding arrears.

“If they pay timely, then we will procure the essential materials for implementing the under-construction projects,” he said.

Humayun Rashid added that the company has suffered a lot due to increased copper, iron and steel prices in the international market after the Russia Ukraine war.

“I wrote a series of letters to PGCB, BPDB and REB to review the tariff of the sub-station due to cost hikes like other infrastructure projects. But they have yet to pay attention to it,” he said.

Energypac MD admitted that the company’s lost its financial strength and said, “I am ready to stop, even blacklist my firm. But over 800 engineers are working here.” 

The company started its journey with Tk 8000 and now possesses Tk 1300 crore working capital.