Power project delayed by one and a half years

A project of the Bangladesh Rural Electrification Board (BREB) being implemented with loans and grants from Germany's development cooperation agency KfW has been delayed by about one and a half years from the outset. The delay was caused by the process of appointing an international consultant as required under KfW's conditions. The project duration has now been proposed to be extended by one and a half years. Its cost has also been proposed to increase by Tk 248 crore 64 lakh.

The Ministry of Power, Energy and Mineral Resources has proposed the first revision of the project titled "Renovation and Modernization of Existing 33/11 kV Pole Mounted Substations of BREB (Phase 1)." A Project Evaluation Committee (PEC) meeting was held at the Planning Commission on September 7 over the proposal. Dr. Nurunnahar Chowdhury, member secretary of the Planning Commission, chaired the meeting.

At the meeting, the chair sought to know the reasons behind the delay in project implementation. In response, the project director said an international "Project Implementation and Supervision Consultant (PISE)" had to be appointed at the beginning of the project under the conditions of KfW's loan. Through this consultant, the design, drawings, specifications, bill of quantities (BOQ), tender documents and other necessary documents had to be prepared according to KfW's own guidelines before the main work could begin.

However, the lowest evaluated bid in the first tender invited to appoint the consultant was about 103 percent higher than the amount allocated in the Development Project Proposal (DPP). As a result, the tender had to be canceled and a retendering process had to be initiated. This caused an additional one year and six months to be spent on the consultant recruitment process alone. In addition, time was required for KfW's "No Objection Certificate (NOC)," the tender process and related activities.

The project director said the consultant was appointed on January 15, 2025. Project activities gained momentum afterward.

Additional Secretary of the Power Division (Planning) Nur Ahmad said at the meeting that discussions had been held with the Economic Relations Division (ERD) and the development partner over the project's slow progress and other issues. He said project activities have now gained momentum and will increase further in the coming days.

According to sources, the original project cost was Tk 679 crore 72 lakh. Of this, government funding was Tk 192 crore 38 lakh 94 thousand. KfW's loan and grant amounted to Tk 477 crore 40 lakh 58 thousand. The implementing agency's own contribution was Tk 9 crore 92 lakh 84 thousand.

The project was scheduled to run from June 2022 to June 2026. The first revision proposes extending the project duration until December 2027. At the same time, the total project cost has been proposed at Tk 928 crore 36 lakh 65 thousand. This means the cost will increase by Tk 248 crore 64 lakh 29 thousand or 36.58 percent from the original approved cost. KfW's funding is proposed to increase to Tk 726 crore 4 lakh 86 thousand.

Under the project, 23 old wooden pole mounted substations in the areas of 15 rural electricity cooperatives across 14 districts in the Dhaka, Khulna, Chattogram and Mymensingh divisions will be renovated and modernized. This will increase distribution capacity from 410 megavolt amperes (MVA) to 530 MVA. In addition, 2,760 kilometers of existing distribution lines in the project areas will undergo reconductoring.

Earlier, at a PEC meeting held on June 8, several decisions were made without recommending approval of the project's revision due to its very low progress.