Bangladesh: Analyzing Hasina era Adani Power Deal
- Thread starter UKBengali
- Start date
LeonBlack08
INT'L MOD
It's not only the price per coal where this deal is being challenged. But these Indian members are only pointing to that specific point and completely disregarding the other circumstances that screams corruption.
I had already shared this before: https://www.aljazeera.com/economy/2023/3/30/bangladesh-in-a-hot-seat-over-adanis-power-deal
The very reason for having this deal when Payra, Bashkhali and Rampal plants were in pipeline is questionable. Especially when you consider that one of the local plant sitting idle due to lack of coal right now. All while we have clauses for capacity charge which we will be forced to pay to Adani even if they don't supply power. This clause exists in every single other quick power rental scheme BAL had signed in the last decade and a half.
BAL had approved several other quick rental power purchase by grossly over-estimating the electricity needs. Most of these quick rental expensive gasoline based plants belonged to Summit Power, owned by Col Faruk who was a BAL MP and also a minister. Talk about conflict of interest. He laundered so much money through this scheme that he is now ranked amongst one of the richest in Singapore.
The whole thing is a prime example of flawed planning driven by corruption.
More than Adani, it is the fault of the BAL government to facilitate an arrangement like this. And we are criticizing BAL more than Adani. He is a foreigner out to make money in whatever way he can. What angers Bangladeshis is why our own countrymen sold out national interest for their own self interest.
But some Indians here are taking it so personally as if they are related to Adani himself.
UKBengali
Elite Member
- Thread starter
- #168
Yes it is no longer required, especially as Roopur nuclear will come online next year.
However when the planning was done, no one expected that BD economy would have had many years in the early 2020s of sub-7% growth. In fact some were predicting this decade BD economy would even be growing at 8%+ average as it looked like the underlying growth rate was inching upwards.
Not saying the Adani deal did not have an element of corruption in it but we cannot blame the government for at least wanting the extra capacity it will bring when it came into service last year.
SoulSpokesman
Trusted Member
@LeonBlack08 @UKBengali
I think his point was that unless we have this information, then we cannot say Adáni is overcharging.
Thanks, UKB Dada, that was my point. I dont know the calorific value of the coal being used in the 3 plants. else I would have posted it. But your IG has, why dont they post this data? Doodh ka doodh, paani ka paani
Especially when you consider that one of the local plant sitting idle due to lack of coal right now.
That is the whole point! You need the Adani plant because it has coal. What good is a plant if it cant get coal? Not having the Adani plant wouldnt have solved the problem of not having coal at this station.
I wrote in an earlier post that for BD to chase power self-sufficiency is a chimera, BD needs to get power from where it is cheapest, which means IND, NEP, BHU and hopefully some day Burma too.
Regards
Regards
I think his point was that unless we have this information, then we cannot say Adáni is overcharging.
Thanks, UKB Dada, that was my point. I dont know the calorific value of the coal being used in the 3 plants. else I would have posted it. But your IG has, why dont they post this data? Doodh ka doodh, paani ka paani
Especially when you consider that one of the local plant sitting idle due to lack of coal right now.
That is the whole point! You need the Adani plant because it has coal. What good is a plant if it cant get coal? Not having the Adani plant wouldnt have solved the problem of not having coal at this station.
I wrote in an earlier post that for BD to chase power self-sufficiency is a chimera, BD needs to get power from where it is cheapest, which means IND, NEP, BHU and hopefully some day Burma too.
Regards
Regards
BananaRepublic
Trusted Member
Adani deal was also a hedge against the operational date of the nuclear power plant.
It’s already been delayed.
Do you want to go back to the martial law and BNP days of 24/7 load shedding!!
BananaRepublic
Trusted Member
You are one of the few people who uses logic and is rational.
In an otherwise troll infested forum!!
SoulSpokesman
Trusted Member
You are one of the few people who uses logic and is rational.
Thanks, Kola bhai although I think that title belongs to you, UKB dada, @Meengla @PakFactor and a few others.
However when the planning was done, no one expected that BD economy would have had many years in the early 2020s of sub-7% growth.
Exactly, countries must prepare for growth as it must for disasters. No one in late 2010s could have seen the double whammy of the Chinavirus and Ukr.
Regards
Thanks, Kola bhai although I think that title belongs to you, UKB dada, @Meengla @PakFactor and a few others.
However when the planning was done, no one expected that BD economy would have had many years in the early 2020s of sub-7% growth.
Exactly, countries must prepare for growth as it must for disasters. No one in late 2010s could have seen the double whammy of the Chinavirus and Ukr.
Regards
UKBengali
Elite Member
- Thread starter
- #173
BD literally got 1.5GW of electricity for over a year on deferred payment plan when it had no forex to buy coal to run some of its newly built coal fired power stations.
Just think what the power situation would have been in BD over the last 18 months without this plant!
@SoulSpokesman
vasanthm
Trusted Member
Even factoring in a modest 8% annual interest, this seems like a beneficial deal. Without pointing fingers, it appears that some people from particular regions or communities may not fully grasp the concept of the time value of money.
SoulSpokesman
Trusted Member
@UKBengali
BD literally got 1.5GW of electricity for over a year on deferred payment plan when it had no forex to buy coal
That is a cool way to look at it for sure! Anyway you will still need Godda cos it will still be cheaper than gas or oil faced stations. I am not saying that there would be no hanky panky in the deal at all- knowing Adanis it is quite likely there was. But it cant be a huge sum for sure- a little bit of give or take can be worked out.
Regards
BD literally got 1.5GW of electricity for over a year on deferred payment plan when it had no forex to buy coal
That is a cool way to look at it for sure! Anyway you will still need Godda cos it will still be cheaper than gas or oil faced stations. I am not saying that there would be no hanky panky in the deal at all- knowing Adanis it is quite likely there was. But it cant be a huge sum for sure- a little bit of give or take can be worked out.
Regards
LeonBlack08
INT'L MOD
@BananaRepublic @vasanthm
Yes everyone out here supporting the deal is economists and rest of us don't understand the concept of time value of money. That secret knowledge is restricted to Indians and Hasina supporters. Did you bother reading on what basis this deal is being criticized instead of throwing in your one liner about return? Is that how you do your project financial analysis without looking at non-financial factors? Good luck to your employer.
The US-based Institute of Energy Economics and Financial Analysis (IEEFA), pointed out in its 2018 report, Adani Godda Power Project: Too expensive, too late and too risky for Bangladesh (PDF) that the project was “clearly designed to benefit Adani” and is, at least in part, “an attempt to prop up Adani Enterprises’ troubled Carmichael coal project in Australia”.
Also from the report from IEEFA who published it in 2018 -
@BananaRepublic - This debunks your hedging claim. It became operational even later than Payra 1.3 GW (2020) and Rampal 1.3 GW (2022)
Godda Will Not Be Operational for Years (It became fully operational in March 2023)
Like the Rooppur nuclear power project, the timeline for commercial operation at the proposed Godda plant seems highly optimistic. An Adani executive recently stated that electricity exports to Bangladesh should begin before the next national Indian elections, which are due by May 2019.31 (This did not happen)That schedule seemed overly hopeful given that Adani still has not secured the land needed to build the project or finalised finance. That timetable also seemed anomalous given that the selection of engineering, procurement, and construction (EPC) contractor to build the project still has not been announced.
In March 2017, the Jharkhand Chief Secretary stated that Adani would begin work on the Godda project in June 2017 and that construction would take 18 months.32 It was not until January 2018 that Adani said any work had started, and even then, Adani refused to give details.33
Most telling, in its latest financial results for 31 December 2017, Adani Power stated that the plant would not become operational until May 202234— a much longer time frame than originally promised. By comparison, solar and wind plants can be constructed and operational in 18 months.
Yes everyone out here supporting the deal is economists and rest of us don't understand the concept of time value of money. That secret knowledge is restricted to Indians and Hasina supporters. Did you bother reading on what basis this deal is being criticized instead of throwing in your one liner about return? Is that how you do your project financial analysis without looking at non-financial factors? Good luck to your employer.
The US-based Institute of Energy Economics and Financial Analysis (IEEFA), pointed out in its 2018 report, Adani Godda Power Project: Too expensive, too late and too risky for Bangladesh (PDF) that the project was “clearly designed to benefit Adani” and is, at least in part, “an attempt to prop up Adani Enterprises’ troubled Carmichael coal project in Australia”.
Also from the report from IEEFA who published it in 2018 -
@BananaRepublic - This debunks your hedging claim. It became operational even later than Payra 1.3 GW (2020) and Rampal 1.3 GW (2022)
Godda Will Not Be Operational for Years (It became fully operational in March 2023)
Like the Rooppur nuclear power project, the timeline for commercial operation at the proposed Godda plant seems highly optimistic. An Adani executive recently stated that electricity exports to Bangladesh should begin before the next national Indian elections, which are due by May 2019.31 (This did not happen)That schedule seemed overly hopeful given that Adani still has not secured the land needed to build the project or finalised finance. That timetable also seemed anomalous given that the selection of engineering, procurement, and construction (EPC) contractor to build the project still has not been announced.
In March 2017, the Jharkhand Chief Secretary stated that Adani would begin work on the Godda project in June 2017 and that construction would take 18 months.32 It was not until January 2018 that Adani said any work had started, and even then, Adani refused to give details.33
Most telling, in its latest financial results for 31 December 2017, Adani Power stated that the plant would not become operational until May 202234— a much longer time frame than originally promised. By comparison, solar and wind plants can be constructed and operational in 18 months.
LeonBlack08
INT'L MOD
Did Bangladesh make payments to Adani? Yes.
Could that payment instead have been used to purchase coal to operate its own power plants? Yes.
Instead of utilizing our own power plant, we are being forced to utilize Adani. Because not using Adani would mean we will still have to pay Capacity charge to Adani for being on stand-by. Now does that make sense my friend?
A simple case of opportunity cost. Not sure why is it so difficult for some to understand.
vasanthm
Trusted Member
If the deal was so bad, then why is the current interim BD govt scrambling to keep the deal going by urgently arranging finance to pay Adani.. have they also been bribed and purchased?
SoulSpokesman
Trusted Member
@LeonBlack08
My understanding is
Adani payments were always made with a 6-9 month gap.
Secondly, BD was getting power in return.
Finally, even if the own power plants were lying idle they too would be getting capacity charges.
My understanding is
Adani payments were always made with a 6-9 month gap.
Secondly, BD was getting power in return.
Finally, even if the own power plants were lying idle they too would be getting capacity charges.
LeonBlack08
INT'L MOD
1. They have other immediate priorities, but they have already launched a committee to review all Hasina era deals.
2. Again - refer back to capacity charge. If we don't buy electricity, we still pay a hefty amount in the form of capacity charge. So unless it is possible to cancel the deal, under the current circumstances that Hasina regime has forced us in, it is most likely better to buy electricity from Adani than make combined payments of -
a. capacity charges to Adani and
b. purchase of coal to operate the local power plants sitting idle.
Had we not been in this deal or had this deal been easily terminated - then Bangladesh would definitely have chosen to terminate and instead buy coal to produce from its 1.3GW power plant sitting idle.
The criticism has always been why hasina regime forced us to get into this deal when 3 other coal based power plants and 1 nuclear power plant was about to be operational in similar time range. It's not like Adani was a stop-gap measure, because it too came operational later than the others, which makes the deal redundant.
