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Dhaka Thursday,  Apr 18, 2024

Rampal Controversy Continues After EPC Deal

EB Report

Bangladesh, after much controversy, has finally signed at the EPC (Engineering, Procurement, and Construction) Contract on installing the coal-fired Power Plant of Rampal.

According to Syeda Rizwana Hasan, executive director of the Bangladesh Environment Lawyers Association (BELA), the signing of the contract for the power plant would be suicidal. The government is moving fast forward with this project despite the protests from national and international Environmentalists claiming that the Power Plant project will cause massive and irreparable damages to the flora, fauna and ecology of the Sundarbans, a UNESCO World Heritage Site, which is also a home to the Royal Bengal Tiger. However, government encounters such protests saying that, the government had taken all necessary measures to safeguard the mangrove forest.

The Rampal plant is located just 14 kilometres upstream of the Sundarbans and is estimated to burn 4.72 million tonnes of imported coal a year, which means it’ll require roughly 10-12 thousand metric tonnes of coal per day. Almost all the coal needed for this plant is likely to be shipped to the plant using the river channel which will increase the river traffic immensely. Environmentalists said that the highly increased water traffic, dredging, loading-unloading may disturb the wild and marine life. And any accidental voyage sink could drastically affect the ecosystem of the river. Besides, the authority couldn’t fix the sources of the coal and the route to be used for shipping and other related things. Green activists are also concerned about the ashes and other detrimental chemicals that may erupt from the burning coal.

Earlier, World Heritage Centre of UNESCO sent a 3 manned team of high-profile specialist to assess the possible impacts of the proposed coal-based power plants and also an oil spill that took place on December 9, 2014, with a name of ‘Re-active Monitoring Mission’. The existence of Sundarbans in UNESCO’s world heritage list will be reconsidered on the basis of this specialist team’s report.

sultana kamal


The UNESCO mission had scheduled to meet environment activists but could not sit with them due to the unwillingness of the government, said Sultana Kamal, the convener of the National Committee to Protect Sundarbans. “Hence, we won’t be surprised if the probable report is incomplete and one-sided,” she said. However, she hoped that the UN team members will be much cautious in preparing the report.

In a related development, the state minister for power and energy held a meeting with environmentalists and economists to convince them about the Rampal project. However, the attendees were not convinced. The Sundarbans activists said that the government shouldn’t sign the EPC deal while the government-activist discussion is still in progress.

The EPC deal worth $1.49 billion, which will be financed by the Indian Exim Bank and the total cost of this Power Plant Project is estimated as $2.0 billion. A few months earlier BHEL submitted the USD 1.2-billion proposal for EPC contract winning over the Japanese Marubeni Corporation who asked USD 1.8 billion for the same contract. However, Documents from Bangladesh’s Power division suggests that the EPC cost estimated previously as around 1.39 billion USD. Now, the EPC deal signed with a cost of 1.49 billion USD. Though the signed EPC contract didn’t mention any reason for the cost uprising, the price hike of the raw materials or other time-related issues is assumed to be the reason for the rise of the cost. Therefore, the total project cost is likely to be increased gradually considering these facts. So, the per unit power generation cost at the plant seems to be somewhat uncertain.

A very recent report from Institute for Energy Economics and Financial Analysis (IEEFA) suggests that, the Rampal project should be cancelled as it would set the country back and Bangladesh should invest in Solar Energy. The study shows that, the proposed coal-fired Rampal power plant is heavily subsidised and its electricity generation cost would be 32 percent more than the average power prices in Bangladesh.

Earlier, due to the high possibility of an adverse effect on the Sundarbans, a world heritage wildlife site, most of the international lender stayed reluctant to finance this project. As reported by the UK Guardian, BIFCL approached to at least three French banks to finance the project and finally got refused. Though Ujjal kanti refused the news as mentioning it baseless. However, BIFCL was scheduled to hold roadshows to attract the investors and raise funds from South Korea and Japan as some of the EPC tender participants were from those countries. But again, retreated for the reluctance of the financing agencies.

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