State-owned and private power plants are sourcing large volumes of gas from public sector gas companies for electricity generation. However, due to irregular bill payments by these power producers, a significant amount of dues has piled up. As of now, six gas distribution companies are collectively owed over BDT 210 billion by the power plants. Top officials of these gas companies say they are struggling to manage operations because of these outstanding payments.
According to energy sector insiders, the current government is more proactive in clearing power-related dues compared to the previous administration. However, it has not been as effective in collecting payments from state-owned companies. Despite importing liquefied natural gas (LNG) at a high cost and supplying it to these entities, gas bills remain unpaid. As a result, the state-owned gas distributors are facing financial strain.
The issue of unpaid gas bills has been dragging on for the past three years. As of August last year, foreign companies involved in the sector were owed $750 million. After the interim government came to power, this amount was gradually reduced to $240 million, clearing dues till April last year. Alongside this, it also made progress in settling a large volume of outstanding bills owed to both local and foreign power suppliers—moving at a much faster pace than the previous Awami League government.
According to Petrobangla sources, the total outstanding gas bills from both state-owned and private power plants reached BDT 210.79 billion as of February this year. Of this amount, Titas Gas Transmission and Distribution Company Limited (TGTDCL) alone is owed BDT 80.96 billion. State-owned power plants owe TGTDCL BDT 35.66 billion, while private power producers are yet to pay BDT 45.30 billion.
However, senior officials of gas distribution companies said that if dues from March and April are included, the total outstanding amount in the power sector will exceed BDT 230 billion. Despite taking a hardline approach to recover these dues, the distribution companies have made little progress.
Speaking to Bonik Barta, TGTDCL Managing Director Shahnewaz Parvez said, “Titas is taking a strict stance on recovering outstanding dues. However, the situation is somewhat different when it comes to power plants. Since they are directly linked to the supply management system, taking an immediate hardline approach could have negative consequences. That said, bill collection has slightly improved compared to before. Last month, the collection rate was 110 percent. We’re continuing our efforts. But due to these outstanding bills, Titas is struggling to cover its operational expenses.”
Bakhrabad Gas Distribution Company Limited (BGDCL) is owed a total of BDT 45.95 billion by power companies. Of this, BDT 1.65 billion is due from government power companies, while private power plants owe BDT 44.3 billion.
Karnaphuli Gas Distribution Company Limited (KGDCL), responsible for gas distribution in Chattogram, has outstanding dues of over BDT 6.97 billion from power plants. This includes BDT 6.55 billion owed by state-owned power plants and nearly BDT 430 million by privately owned power plants.
Jalalabad Gas Transmission and Distribution Systems Limited is owed BDT 41.64 billion by power plants. Of this, state-owned power plants owe BDT 23.35 billion, while private power plants owe BDT 18.28 billion.
In the country’s western region, West Zone Gas Company Limited (PGCL) has outstanding dues of BDT 17.36 billion from power plants. Government power plants owe BDT 10.2 billion, and private power plants owe BDT 7.16 billion.
Sundarban Gas Company Limited (SGCL) also has a substantial amount receivable from power plants. The company’s dues for gas supply to these plants total BDT 17.89 billion, with state-owned power plants owing BDT 11.05 billion and private power plants owing BDT 6.84 billion.
Two top officials from the distribution companies, speaking on condition of anonymity, told Bonik Barta, “The government is now paying outstanding bills in the power sector faster than before. Power plants are also receiving funding more quickly. However, they raise various issues when it comes to settling dues. They repeatedly bring the issue of financial losses. The government needs to take a stronger role in addressing this. Otherwise, the companies will continue to face revenue shortfalls due to these unpaid bills.”
State-owned and private power plants receive large volumes of gas from the country’s six gas distribution companies. These companies are owed more than BDT 210 billion in unpaid gas bills. Privately owned power plants (IPPs) alone account for BDT 210.79 billion of that total due.
The power plants use this gas to generate electricity, which they then sell to the Bangladesh Power Development Board (BPDB). However, since BPDB often fails to pay the power plants’ electricity bills on time, the power plants, in turn, cannot pay their gas bills regularly. Although the government has recently reduced the outstanding dues of private companies in the power sector, gas distribution companies still face large unpaid amounts from private power plants.
David Hasanat, President of the Bangladesh Independent Power Producers Association (BIPPA), told Bonik Barta, “The government currently owes three months’ worth of payments in the power sector, down from six months previously. The government has settled bills up to January. We do not see a lack of sincerity from the government regarding these dues. However, some individual decisions have caused discomfort among the IPPs. For example, the service charge was reduced from 9 percent to 5 percent. We are trying to explain our concerns to the government on this matter.”
The gas distribution companies are deeply concerned about the huge outstanding dues. Top executives from these companies say this shortfall is significantly impacting their operational costs and revenue collection. However, officials from the energy department say the government is taking a tough stance on recovering dues. They are especially active in disconnecting connections and removing illegal hookups to ensure better collection efforts.
Mohammad Saiful Islam, Secretary of the Energy and Mineral Resources Division, told Bonik Barta, “The energy division is taking a tough stance on collecting overdue gas bills in the power sector. A list of institutions with outstanding bills has been prepared. If anyone has more than two months’ worth of unpaid bills, we are disconnecting their connections. Disconnections for residential users are ongoing. To remove illegal connections, five magistrates have been appointed who are working in the field around the clock.” Regarding the collection of overdue government gas bills, he added, “A committee has been formed for collecting dues in this sector. We are holding repeated meetings with them to address the issue of outstanding payments.”