Private power manufacturing companies want an amendment to the Independent Power Producer Act, IPP. Through this, they are seeking tax waiver on the import of spare parts for power plants.
Recently, the Bangladesh Independent Power Producers’ Association, BIPPA, has expressed this view after meeting state minister for power, Nasrul Hamid Bipu.
The organisations have said that the 10 percent tax rebate given now is not sufficient. But to give investors this facility, changes need to be carried out in the IPP Act.
An official of the power department says: “If the cost of a project is Tk 5 billion, a waiver of Tk 500 million can be obtained for import of spare parts but investors say that they often have to import more.”
As per IPP policy, investors get tax waiver up to 15 years. Talking about the need to amend the law after 23 years, several officials of the ministry say: “In our country, a person with the permission to produce power can do so for a long period; the agreement with them is renewed and over time, machines get old and more parts are required.”
Around half of the power produced in the country is by private companies and therefore, the PDB is a hostage to them. Since the producers are influential their demands are usually taken to account.
MD of Power Cell, Mohammad Hossain, observes: “Initially, we encouraged the establishment of small power plants to tackle the power crisis; a law was made. And since these power plants run for a certain period, the changing of law does not even arise.”