Power plant
Report appeared in newspapers and electronic media recently that Bangladesh government owned enterprise, Bangladesh Power Development Board (BPDB) and Power Grid Corporation of India Ltd (PGCI), a subsidiary of government of India, had an understanding to form a company in Bangladesh jointly to set up and operate coal based power plants. Each of the two partners, BPDB and PGCI, would subscribe 50% share of the paid up capital of the joint venture company. It is expected to be a good example of co-operation between the two neighbouring countries in South-East Asia.
The news also stated that the company will be managed by the PGCI representatives and the positions of Chairman and Managing Director (Chief Executive) will also be filled by representatives of PGCIL from India.
Bangladeshis have been operating and managing all power plants in Bangladesh. Those are based on natural gas, liquid fuel and hydro power. Two power plants based on coal are also operated by Bangladesh nationals since a decade.
The 50: 50 share basis company if only managed by foreign partners, it would be ridiculous and out of natural justice. The power generation plants of the company intended to be set up in Bangladesh territory, preliminarily at Chittagong and at Khulna. The generated power is to be transmitted and distributed in Bangladesh market. The fuel, i.e., coal for the power generation plants would come from coalmines of Bangladesh.
Considering all those factors the company should be managed by both the major shareholders on check and balance authority basis. That is, the board of directors should be constituted with equal number of directors representing each partner. The position of Chairman of the board should be from Bangladesh national and representative of BPDB. The chief executive of the company, Managing Director should be an experienced management professional. He or she must be selected and appointed by the board of directors for certain time with compensation package and be Ex-officio director of the board. Preference should be given to Bangladeshi nationals as the area of main operation of the company will be in the territory of Bangladesh.
Formation of the joint venture company is at an initial stage. The Power Division of Bangladesh government and BPDB should not compromise on the above check and balance status of the management authorities of the proposed joint venture company. All concerned should keep in mind that according to the prevailing Companies Act, 1994 all authority virtually is vested on the board of directors of the company if not determined early and provisions are made in the Memorandums of Association and Articles of Associations of the company and registered with the Registrar of Companies and firms, Bangladesh. Once the company is formed and majority authority is given to PGCI representatives, change would not be possible even if desired by BPDB later as the share of the partners supposed to be equal and in the event of difference of opinion no decision of amendment of Memorandums of Association or Articles of Association would be possible.
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