Despite numerous court orders and regulatory decisions, United Group, once a dominant player in the power sector under the Awami League government, continues to operate its two gas-based power plants, charging inflated prices and exploiting consumers.
The group's operations, particularly at its 86 MW plant in the Dhaka Export Processing Zone (EPZ) and the 72 MW plant in the Chittagong EPZ, have raised eyebrows, with many wondering how these plants are still running.
These plants, considered a "golden goose" for United Group, produce power at a cost of Tk4.17 per unit using gas but sell it at an exorbitant rate of Tk10.88 per unit to consumers, often charging even more in some cases.
Each plant can generate 1,58,000 units of electricity per hour, amounting to 37,92,000 units per day. With the company earning a profit of more than Tk4 per unit, their daily profits run into the millions, while they continue to deceive customers by claiming to offer lower rates than government distributors.
Bangladesh Power Development Board (BPDB) purchases electricity from various sources, ranging from Tk4.17 for gas-based power to Tk8-12 for coal-based power, Tk16-18 for furnace oil, and as high as Tk28 per unit for diesel-generated power.
Naturally, the average cost from these sources is high, yet United Group continues to exploit the least expensive gas-based electricity, charging consumers at a much higher rate.
Court orders ignored in favour of gas price reductions for United Group
United Group's manipulation of gas prices for their power plants is unparalleled. At the time, gas prices for captive power plants (those used for industrial purposes) were Tk30 per cubic metre, while government power plants paid Tk16.
When United Group sought to pay the lower rate for gas, the matter went to the Bangladesh Energy Regulatory Commission (BERC), which rejected their claim.
The company then appealed to the High Court, where they lost, and even to the Supreme Court, which also ruled against them.
Despite these legal setbacks, an executive order was issued, lowering the gas price for United Group, allegedly through a special arrangement with high-level government officials.
It is rumoured that a portion of the profits from this arrangement was sent to individuals both domestically and abroad.
Not only has United Group engaged in price manipulation, but it is also the only entity in the country with the authority to set its electricity prices, functioning parallel to BERC.
While BERC sets prices for other entities, United Group continues to sell power to various companies at rates of its own choosing.
Under Bangladesh’s laws, government, private, and captive power plants operate under strict regulations, with Independent Power Producers (IPP) required to sell power only to the government.
Captive power plants, meanwhile, are allowed to sell surplus electricity under certain conditions, but BERC retains the authority to set prices.
In contrast, United Power Generation and Distribution Company’s 86 MW plant in the Dhaka EPZ and 72 MW plant in the Chittagong EPZ operate without following any legal guidelines.
Although the plants do not sell electricity to the government, BERC had set the gas price for them at Tk30 per cubic metre.
At the same time, the rate for IPPs was Tk16. This discrepancy is believed to have sparked a conflict between the executive branch and the regulatory commission, leading to the executive branch stripping BERC of its authority to set gas and electricity prices.
Regulatory conflict over gas pricing
Pressure from the Ministry of Power began to mount on BERC to lower the gas price for United Group to Tk16, equivalent to that of IPPs.
This resulted in a back-and-forth exchange of letters between the power division and BERC.
Abdul Jalil, the then-chairman of BERC, stood firm, stating that United Group's power plants did not qualify as IPPs and, therefore, should pay the captive rate of Tk30 per cubic metre. Despite pressure from the power division, BERC maintained its decision.
Speaking to the media, he confirmed that there was no legal provision for United Group's plants to be considered IPPs.
Similarly, BERC's former member (gas), Mokbul-e-Elahi Chowdhury, expressed his astonishment at how the company managed to secure the lower gas rate.
He reiterated that both BERC and the courts had rejected their appeals, and even the High Court had ruled against them.
Unprecedented power and distribution licence violations
Dr Shamsul Alam, energy adviser to the Consumer Association of Bangladesh (CAB), stated that United Group's distribution licence contravenes the fundamental structure of the state.
He further pointed out that under the constitution, no private company should hold a distribution licence, yet United Group has been allowed to distribute electricity.
He questioned whether the Prime Minister had the authority to grant such approval, suggesting that even she was not above the law.
United Group emerged as a dominant player in the power sector during the Awami League government, amassing a series of dubious achievements rarely seen elsewhere in the world.
Laws and their interpretations were twisted to accommodate the company’s operations, allowing United Power Generation and Distribution Company (UPGD) to rise to prominence as a new entity.
While many within the BPDB had hoped that the group's influence would wane with the change in government, it appears to have continued unabated, thanks to some invisible force.
United Group was also involved in the controversial 195 MW power plant tender at Ashuganj, where allegations of bid manipulation arose.
Despite being required to offer 29% of the plant’s shares to Ashuganj Power Station Company, United Group only provided 6%. They have also sold off two power plants in Khulna.
The KPCL-2 (115 MW) plant was initially contracted for five years in 2010, yet even after recouping their investment within this period, they pocketed thousands of crores through capacity payments in 2016.
When contacted for comment, United Group Chairman and Managing Director Moinuddin Hasan Rashid declined to comment directly on the court rulings, suggesting that his legal department would be better equipped to provide details.
