PDB’s outstanding bill stands at Tk 59,507cr

Farhad Chowdhury : The amount of outstanding bills in the electricity sector is increasing. At the end of the last financial year, the outstanding electricity bills of public and private centers and imported from India were Tk 21,481 crores. At the end of September of the current financial year, it increased to Tk36,853 crores. That is, the arrears increased by Tk15,372 crores in three months. The government was forced to pay some of the outstanding bills in bonds. Besides, the subsidy is also waived.
However, the Ministry of Finance is subsidizing less than the demand. As a result, the amount of arrears has increased instead of decreasing. At the end of last January, the arrears increased to Tk59,507 crores. That is, the arrears of the Power Development Board (PDB) increased by Tk 22,654 crore in four months. PDB is struggling with outstanding bills. Therefore, on an urgent basis, the power department has written to the finance ministry to release the remaining Tk17,701 crores of subsidy allocated in the budget for the current financial year.
According to the letter sent on March 6, despite the payment of Tk 10,599 crore through bonds against the local loans of private power generation companies, the total unpaid bill for power purchase from India including public-private power generation companies and Adani has stood at Tk 42,707 crore till January 2024. In addition, the amount of unpaid bills of government power generation companies and domestic import-dependent coal-based power generation companies till January 2024 isTk16,799.83 crores.
The letter sent before the start of Ramadan further states that the remaining subsidy amount of Tk 17,701 crores for the financial year 2023-24 needs to be released for the payment of unpaid bills on an urgent basis for the purpose of uninterrupted power supply during the upcoming Holy Ramadan, irrigation and summer season. Out of this, Tk4,000 crores of subsidy will be required in this month, Tk4,500 crores in April, Tk4,500 crores in May and Tk4,701 crores in June.
Incidentally, in the current fiscal year, an allocation of Tk35,000 crores has been allocated for subsidy in the power sector. However, as of last February, the Ministry of Finance has released less than half; That is Tk17,299 crore. Still Tk17,701 crores of subsidy is yet to be released. The electricity department has requested to waive this amount. However, most of the current fiscal year’s subsidy will be spent by PDB to cover the deficit of the previous fiscal year. As a result, the deficit in the power sector will increase in the future.
According to sources, the Ministry of Finance started delaying the electricity subsidy exemption from the financial year 2020-21. Due to recession in government revenue and budget deficit, subsidies are given much less than required. This will affect the next financial year. In this way, the arrears are gradually increasing. PDB’s subsidy demand for the fiscal year 2020-21 was Tk 11,778 crore. But the finance ministry allocated Tk8,945 crore. In this the deficit subsidy of that financial year is paid in 2021-22 financial year.
Again, the subsidy demand of PDB increased to Tk29,658 crores in 2021-22 financial year. However, the Ministry of Finance allocated Tk11,963 crore. This re-freezes the subsidy for that financial year, which is replenished in the 2022-23 financial year.
The demand for subsidies increased to Tk42,893 crores in the financial year. However, the allocation for this sector was Tk27 thousand crores. As a result, after meeting the deficit of the previous fiscal year, only Tk7,359 crores of demand could be met in the last fiscal year.
This chain effect of subsidy arrears falls in the current financial year. At the end of last June, the subsidy arrears in the electricity sector accumulated to the tune of Tk36,341 thousand crores. Of this, Tk10,599 crores have been paid in bonds. That is, even after paying the bond, the outstanding subsidy of the last financial year was Tk 25,742 crores. As a result, the deficit of the previous financial year is still being met with the subsidy allocated for the current financial year.
Meanwhile, subsidy of Tk 39 thousand crore will be required in the current financial year. However, less than Tk10 thousand crore can be met with the allocated money. As a result, at the end of the current fiscal year, the outstanding subsidy will be Tk29 thousand crore. However, no one has agreed to make an official comment on this matter. However, several officials of the PDB and Power Department said that they are regularly communicating with the Ministry of Finance to speed up the subsidy exemption and increase the allocation. But no significant progress has been made. In this, the bills of public and private power plants have accumulated. As a result, the power sector as a whole is facing major challenges.
It is to be noted that, despite the subsidy concession letter of Tk 4,000 crore for the current month, India’s Adani Power (Jharkhand) Limited has to pay Tk 1,500 crore. And one and a half thousand crore rupees have to be paid to pay the unpaid bill of coal import of the domestic coal-based power plant. If this amount is not paid quickly, load shedding will become extreme during Ramadan and summer. Therefore, Tk 3000 crore has been mentioned in the letter for exemption as subsidy on emergency basis.