Power deals can’t be scrapped at will: minister

Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood yesterday said the government cannot cancel contracts with private power producers at will because they are backed by sovereign guarantees, making the process legally complex and time-consuming.

“The previous fascist government handed over several power plants to private companies,” he said while responding to a supplementary question from reserved-seat member of parliament Mardia Mumtaz during the question hour in parliament.

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“In those agreements, sovereign guarantees were provided, meaning the state itself guaranteed the contracts. Cancelling such guarantees is a lengthy process. We are negotiating with the companies on several issues, particularly late payment fees, which we are refusing to pay. Hopefully, these discussions will be fruitful,” he said.

Mahmood said power plants already in operation could not be managed through ad hoc arrangements.

“As long as the contracts remain valid, we will work to reduce costs and ensure electricity is supplied at affordable rates,” he added.

Replying to a question from Mostafizur Rahman, a member of parliament from the Jamalpur-3 constituency, the minister said no quick rental power plants are currently operational, and there are no active contracts with such facilities.

However, he said the contracts of two rental power plants were renewed after expiry on a “no electricity, no payment” basis, and the plants remain in operation. Since no quick rental plants are operating, the government is not paying any capacity charges for them.

Responding to a question from Mohammad Kamal Hossain, the Dhaka-3 constituency MP, Mahmood said the country currently supplies around 2,700 million cubic feet of gas a day against a demand of about 3,800 million cubic feet.

The shortfall has left Dhaka and other parts of the country receiving significantly less gas than required, disrupting supply, he said.

Answering a question from Golam Rasool, the Jessore-4 constituency MP, the minister said transmission loss stood at 3.04 percent and distribution loss at 7.38 percent in fiscal year 2024-25 (FY25). Up to April of FY26, transmission loss was 3.27 percent, while distribution loss declined to 6.29 percent.

Replying to a question, Mahmood said international fuel prices had started to decline following the end of the Iran-Israel-US conflict.

However, he said prices remain above the break-even level, leaving the Bangladesh Petroleum Corporation to incur daily losses of Tk 78 crore on diesel, octane and petrol sales.

He said the BPC incurred total losses of Tk 18,699 crore between March and June 23.

“If international prices fall further to a sustainable level, the government will consider reducing domestic fuel prices to ease public hardship,” he said.

In response to another question, Iqbal Hassan said two committees formed to review power purchase agreements signed under the Electricity and Energy Supply Enhancement (Special Provisions) Act, 2010, had submitted separate reports, and the government was taking necessary steps based on their recommendations.