Bangladesh: Analyzing Hasina era Adani Power Deal

[UKBengali]

MOD EDIT: Thread dedicated for discussions related to Adani Power Deal.

Re-Posting this:

Adani Godda Power Project
Too Expensive, Too Late, and Too Risky for Bangladesh
April 2018
Institute for Energy Economics and Financial Analysis
Tim Buckley, Director of Energy Finance Studies, Australasia ([email protected]) and
Simon Nicholas, Energy Finance Analyst ([email protected])

Report too long to copy and paste - but the PDF is attached.

Do you remember the haters claiming BD had overcapacity lol

Counting those clunked out generators from the 1970s into the mix lol

I think the new BD government is actually looking at Adani maybe walking out of the contract or trying to renegotiate as 14 Taka/Kwh is a bit high.

Something like 11-12 Taka/Kwh would have been a more fair price, taking into account the fact that Adani built the plant for 3 billion US dollars and the pollution ends up in India and not in BD.

Adani should be willing to at least drop the price down to 11-12 Taka/Kwh and a new modfied contract can be signed. Of course BD needs to pay all outstanding dues at the current 14 Taka/KwH price.

 

[Afif]

Lot of that “generation capacity” is on expensive oil and gas.

So? Our maximum demand is 17,200MW. Much less than total production capacity.

 

[BananaRepublic]

I think the new BD government is actually looking at Adani maybe walking out of the contract or trying to renegotiate as 14 Taka/Kwh is a bit high.

Something like 11-12 Taka/Kwh would have been a more fair price, taking into account the fact that Adani built the plant for 3 billion US dollars and the pollution ends up in India and not in BD.

Adani should be willing to at least drop the price down to 11-12 Taka/Kwh and a new modfied contract can be signed. Of course BD needs to pay all outstanding dues at the current 14 Taka/KwH price.

That would be a fair ask especially given plummeting energy prices.

But toxic atmosphere probably not allow it.

Adani also will take instructions from Modi. So not strictly a business decision.

 

[UKBengali]

That would be a fair ask especially given plummeting energy prices.

But toxic atmosphere probably not allow it.

Adani also will take instructions from Modi. So not strictly a business decision.

New government probably wants to discuss exactly what was in the contract as it has not been made public yet.

Even if the previous government signed up for 25 years, it can still be challenged by BD in court as being "unfair and one-sided", as Adani may have specified a fixed and too high price for coal. The price of coal should be flexible and based on current market price.

Adani and BD need to come together and agree a better price and terms for the contract as currently it looks like favouring Adani more than BD.

 

[LeonBlack08]

Lot of that “generation capacity” is on expensive oil and gas. And those power stations are some of the least fuel efficient. Not to mention polluting.

Talking of efficiency and pollution - Do you know what the Adani plant supplying to Bangladesh is based on? Coal.

It is the least efficient out of all sources.

 

[UKBengali]

Talking of efficiency and pollution - Do you know what the Adani plant supplying to Bangladesh is based on? Coal.

It is the least efficient out of all sources.

The price per kw/h negotiated by AL is too high as it should be maybe 11-12 Taka kw/h.

However the pollution ends up in India and the plant itself is about as efficient as it gets for a coal one.

The idea was good but I do not understand how AL agreed to such a high price per kw/h?!

 

[LeonBlack08]

I think the new BD government is actually looking at Adani maybe walking out of the contract or trying to renegotiate as 14 Taka/Kwh is a bit high.

Something like 11-12 Taka/Kwh would have been a more fair price, taking into account the fact that Adani built the plant for 3 billion US dollars and the pollution ends up in India and not in BD.

Adani should be willing to at least drop the price down to 11-12 Taka/Kwh and a new modfied contract can be signed. Of course BD needs to pay all outstanding dues at the current 14 Taka/KwH price.

Either this govt or the next democratically elected govt will have to eventually go to court to settle this. The contract has given many one sided advantages to Adani, which was a by product of Hasina regime corruption.

Adani cashing in on a 'one-sided' deal

Redirect Notice

Instead of Adani plant, we should have secured steady coal supply at Matarbari power plant which is now closed due to a lack of coal supply. That's our own plant. Instead we went for more expensive electricity import from another coal powered plant. Complete mismanagement - again a by product of an extremely corrupt system.

 

[LeonBlack08]

The price per kw/h negotiated by AL is too high as it should be maybe 11-12 Taka kw/h.

However the pollution ends up in India and the plant itself is about as efficient as it gets for a coal one.

The idea was good but I do not understand how AL agreed to such a high price per kw/h?!

Corruption. Deals under the table and I believe Modi played a part too. He and Adani are buddies.

 

[UKBengali]

Either this govt or the next democratically elected govt will have to eventually go to court to settle this. The contract has given many one sided advantages to Adani, which was a by product of Hasina regime corruption.

Adani cashing in on a 'one-sided' deal

Redirect Notice

Instead of Adani plant, we should have secured steady coal supply at Matarbari power plant which is now closed due to a lack of coal supply. That's our own plant. Instead we went for more expensive electricity import from another coal powered plant. Complete mismanagement - again a by product of an extremely corrupt system.

Yes it seems likely that there was some Modi-Hasina-Adani corruption there.

Price of 14 Taka kw/h cannot be justified under any circumstances but the temporary extremely high prices after Ukraine war that has now mainly gone back down to normal.

We just need to see the details of the contract which was never released for independent scrutiny.

 

[LeonBlack08]

Yes it seems likely that there was some Modi-Hasina-Adani corruption there.

Price of 14 Taka kw/h cannot be justified under any circumstances but the temporary extremely high prices after Ukraine war that has now mainly gone back down to normal.

We just need to see the details of the contract which was never released for independent scrutiny.

Usually anything that involves corruption, has unfair clauses embedded that will make it super expensive for Bangladesh to terminate the contract and prevent from renegotiating. I am afraid we may just have to live with this. But would surely like to see the terms and conditions of the contract being made public and independently reviewed.

 

[UKBengali]

Usually anything that involves corruption, has unfair clauses embedded that will make it super expensive for Bangladesh to terminate the contract and prevent from renegotiating. I am afraid we may just have to live with this. But would surely like to see the terms and conditions of the contract being made public and independently reviewed.

I think contracts of lengths like this can indeed be challenged in court.

If the price is reduced by 25% which would be considered reasonable, then that would save 5-6 billion US dollars over the term of the contract.

Adani makes a decent profit out of this? Sure that is absolutely fine but with coal prices back to historical norms now, it is downright extortionate.

 

[BananaRepublic]

I think contracts of lengths like this can indeed be challenged in court.

If the price is reduced by 25% which would be considered reasonable, then that would save 5-6 billion US dollars over the term of the contract.

Adani makes a decent profit out of this? Sure that is absolutely fine but with coal prices back to historical norms now, it is downright extortionate.

Anything Adani is involved with is by definition corrupt.

Look at some of the stuff they have done in mother India lol

The problem is that a country like BD has very little choice as it cannot raise foreign currency from the money markets given it is an LDC.

And a huge skills shortage so key designs and works need foreign partners! Which inflates costs!

Non corrupt partners like Japan have limited capacity - so for additional investment you have to leverage the likes of Adani.

Also, it’s not a choice between 11 taka and 14 taka.

It’s a choice between 14 taka and no investment.

No point being precious about it. Have to accept reality whilst you grow.

There’s a reason why AL achieved record breaking growth and infra build.

Bangladesh needs jobs otherwise the idle “students” are going to be preyed on by the Islamists!

 

[AbuShalehRumi]

Hope it is ok for me to praise Hasina's foresight to build the nuclear power station when it was predicted by many here that this would be the worse decision for BD.

That was one of the best things she did for BD, among other great achievements as regards infrastructure.

Of course BD needs a 2nd nuclear power station as soon as possible and so if the BD economy turns around by 2026 as IMF predicts then another deal can be done with Russia for a 2nd Roopur for service in the early 2030s. It should cost a lot less money and time as BD companies and people now have some experience in building and running a nuclear power station.

LOL, the idea and NPP construction site was from Pakistan-era. BAL/hasina didn't do anything for this country. They took USD debt funded mega projects to bag and siphon around 30-50 percent of the inflated price tag.

Barring few almost every BAL/hasina dictatorial era projects are utter crap, unplanned and white elephant projects.

 

[kambhakt]

I think contracts of lengths like this can indeed be challenged in court.

If the price is reduced by 25% which would be considered reasonable, then that would save 5-6 billion US dollars over the term of the contract.

Adani makes a decent profit out of this? Sure that is absolutely fine but with coal prices back to historical norms now, it is downright extortionate.

Why isn't the adani contract made public yet. Its 3 months of the interim government. Power purchase agreements are always linked to price of fuel.

 

[UKBengali]

Why isn't the adani contract made public yet. Its 3 months of the interim government. Power purchase agreements are always linked to price of fuel.

I have a feeling that is what the interim government is trying to extract out of Adani and their own civil service, that is infested with AL appointments.