Agrico International’s Ghiorashal 145 MW power plant has become a focal point of controversy, reportedly generating profits that outpace even speculative financial ventures.
A $10 crore investment into the plant allegedly secured capacity charges totalling $21.14 crore, according to sources within the power sector.
The Bangladesh Power Development Board (BPDB) is said to have extended the plant’s tenure and revised its financial terms under special provisions, benefiting Agrico International significantly.
Initially awarded through an open tender for a three-year period at a capacity charge of $21 per kilowatt, the diesel-based power plant was later approved to operate on dual fuel (diesel and gas).
Following this transition, the capacity charge was reportedly increased to $30 per kilowatt—an unusual adjustment that defied standard contractual practices.
Instead of reducing the capacity charge when extending the plant’s tenure, BPDB allegedly permitted Agrico to secure substantially higher profits.
This revision raised serious concerns, with critics claiming the agreement prioritised corporate gain over national interest, allowing Agrico to extract several times its initial investment.
Financial Windfall Amid Dubious Revisions
Under the initial agreement, BPDB paid Agrico a monthly capacity charge of $3.045 million, amounting to $10.96 crore over the first three years.
However, leveraging special provisions, the contract’s tenure was extended by 18 months, further increasing Agrico’s profits.
The plant’s tenure was eventually prolonged to 4.5 years and later extended by an additional three years.
Over this period, Agrico reportedly amassed capacity charges totalling nearly ৳2,500 crore, a staggering return on its initial investment of approximately ৳700 crore.
Comparatively, establishing a base-load power plant could have cost approximately ৳900 crore for 150 MW, ensuring 20-25 years of uninterrupted electricity.
Alarming Disparities in Electricity Costs
BPDB’s 2011-12 annual report revealed that electricity from the Ghiorashal plant cost consumers ৳12.95 per unit, far higher than the sub-৳2 per unit cost of gas-generated electricity during the same period.
By contrast, the nearby Ashuganj Power Station supplied electricity at only ৳1.92 per unit, with another state-run plant charging just ৳1.51 per unit.
Despite these glaring discrepancies, BPDB repeatedly renewed its agreements with Agrico.
Allegations persist that Agrico International’s arrangements set a precedent for other companies to secure inflated contracts, further burdening the energy sector.
Political Connections and Alleged Corruption
Critics have pointed to the shadowy ownership of Agrico International, reportedly headquartered in the UK, and its alleged ties to politically influential individuals.
Locally, the company operated through InfraDev Associates Limited, led by expatriate Bangladeshi Sarafat Chowdhury Sadi, a distant relative of former bureaucrat Dr Sadat Hossain and reportedly connected to former energy advisor Tawfiq-e-Elahi Chowdhury.
Sadi, known for his audacious dealings within BPDB, allegedly wielded considerable influence.
Sources claim he maintained close ties with senior officials and reportedly facilitated significant profit-sharing arrangements with powerful figures.
Further Controversies
Following the success of the Ghiorashal plant, Agrico secured contracts for two additional plants: an 85 MW power plant in Brahmanbaria and a 95 MW plant in Ashuganj.
Initially contracted for three years, these plants operated for up to eight years after successive contract extensions.
The combined capacity charges for these two plants reached approximately ৳2,700 crore, exacerbating concerns about inflated agreements.
Mounting Costs for Power Generation
The financial implications of such agreements are stark.
BPDB data shows the average cost of power generation, once below ৳2 per unit, skyrocketed to ৳8.50 per unit in 2022 and further to ৳11.51 per unit in the 2023-24 fiscal year.
Adviser Muhammad Fouzul Kabir Khan expressed grave concerns, highlighting that while power is sold at an average rate of ৳8.95 per unit, BPDB often purchases it at prices ranging from ৳12 to ৳25 per unit.
Calls for Accountability
Efforts to contact Sarafat Chowdhury Sadi for his comments were unsuccessful as his phone remained switched off, and messages went unanswered.
His brother, Robin Chowdhury, a senior manager at InfraDev Associates, denied any irregularities, claiming all procedures were followed per regulations.
Energy sector analysts suggest that further investigation into Sadi’s financial dealings and those of his affiliates could expose large-scale corruption involving high-profile individuals.
Agrico International’s case has come to symbolise the alleged cronyism and unsustainable policies that plagued Bangladesh’s energy sector under the previous administration.
Experts believe that addressing such issues is essential for restoring transparency and ensuring a sustainable energy future for the nation.
