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Bangladesh Accepts Chinese Bid for Waste-to-Electricity Plant in Dhaka

Kamran Reza Chowdhury
Dhaka
2020-11-12
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Waste collectors transfer garbage to trucks in Dhaka’s Hatirpool neighborhood, Nov. 11, 2020.
Waste collectors transfer garbage to trucks in Dhaka’s Hatirpool neighborhood, Nov. 11, 2020.
Kamran Reza Chowdhury/BenarNews

The Bangladesh cabinet has accepted a bid from a Chinese state-owned company to build the country’s first waste-to-electricity plant, which energy officials say will generate 42 megawatts of electricity daily while helping clean Dhaka’s rivers and tackle its waste-management problems.

The cost of building and running the plant will be fully covered by China Machinery Engineering Corp. (CMEC), but Bangladesh will pay almost U.S. $2 billion for the power it generates over 25 years, government officials said.

They did not disclose how much the Chinese firm would invest in the project and could not say when construction would begin.

“The committee at today’s meeting approved the proposal for setting up the first-ever waste-to-electricity generation project. China Machinery Engineering Corp. will implement the 42.5 megawatts of electricity project in Dhaka,” Dr. Abu Saleh Mostafa Kamal, an additional secretary of the cabinet division, told reporters on Thursday, referring to a meeting of the Cabinet Committee on Government Purchase, which is headed by the finance minister.

He declined to reveal information about how many and which companies tendered bids for the project. United News of Bangladesh reported that government officials said the CMEC was selected under an “unsolicited process.”

Kamal said the cost per unit of electricity (KWh) that the CMEC plant will produce by burning waste would be 18.295 taka ($0.2178).

The construction of the plant would start with the signing of an agreement involving the power ministry, the Dhaka North City Corp. (DNCC) and CMEC, he said.  No date has been set for finalizing the agreement.

“We will try to implement the project as soon as possible,” Kamal said.

Dhaka’s population in 2019 was more than 20 million, according to the World Bank. The sprawling metropolis has two city authorities – Dhaka North City Corp. (DNCC) and Dhaka South City Corp. (DSCC).

M. Saidur Rahman, the DNCC’s chief waste management officer, said the ever-increasing amount of solid waste poses a huge environmental threat for Dhaka.

“Each day, 3,000 metric tons of waste is generated in DNCC areas. We collect it from every household through the private sector and dump it in low-lying areas in Aminbazar,” he told BenarNews, referring to Dhaka’s north suburb.

“Now we face a herculean task of finding new low-lying areas to dump the waste. This waste is ending up in the rivers, canals and other water bodies for years. We have to stop it now to save the rivers,” he said, noting that the cost to dispose one metric ton of waste is 1,760 taka ($20.76).

Contract details

According to the project papers viewed by BenarNews, the DNCC would provide for free 30 acres to CMEC to set up the plant. The company would also get 3,000 metric tons of waste per day for free to process into electricity.

“For this project, the government will not invest any money. The company will set up the power plant and the government will buy the electricity at the rate of 18.295 taka ($.21) per unit,” Energy Secretary Sultan Ahmed told BenarNews on Wednesday.

“The rate seems higher, but this is because the company will use up-to-date European technology for the project. This project would contribute hugely to protecting the environment from the massive threat of solid waste. Actually, the project would clean Dhaka’s environment,” Ahmed said.

Currently, consumers pay between 6 and 6.5 taka (about $.07) for a unit of electricity, according to Mohammad Tamim, a former government adviser.

Doubts raised

Tamim questioned the deal, saying Bangladesh would be paying too much for electricity from CMEC’s plant.

“The price per unit of electricity at the consumer end ranges between 6 and 6.5 taka, but here the cost is over 18 taka ($.21). This is very costly,” Tamim told BenarNews. “The government should negotiate to reduce the price.”

Anu Muhammad Anisur Rahman, an economics professor at Dhaka’s Jahangirnagar University, said the government must disclose the terms and conditions of the project.

“This government thinks that it has no accountability to the people or to any institution. They have been signing different contracts on development projects with all foreign and local companies without any transparency and accountability,” Rahman told BenarNews.

“There is no functional institution in Bangladesh to make the government accountable. So the government will not disclose details of the waste-to-power project. In the absence of transparency and accountability, the project may contain some terms and conditions which may go against the interest of the country.”

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