Most state-owned power cos need more time to offload shares

Sheikh Shahariar Zaman

State-owned power companies need more time to offload shares as most of them are not yet ready to sell their stakes to the public.

The government in an inter-ministerial meeting in January decided to offload shares of 26 companies by June this year and out of the companies, 12 are owned by power, energy and mineral resources ministry.

"Share offloading is a complex process and out of the 12 companies only Desco is ready to float shares," said a senior official of the ministry.

Desco has already floated 25 per cent of its shares and ready to offload another 25 per cent, he said.

"We are going to seek extension of time for offloading share to June next year to give the companies a breathing space," he added.

The official, however, said if any company thinks that it is ready to float share, it can go ahead with the permission of the ministry.

The ministry is going to form a committee to evaluate the pros and cons of share offloading as it is a very sensitive issue, he said.

Bangladesh Power Development Board (PDB) chairman ASM Alamgir Kabir said the power sector is not a commercial sector and its positive aspect should be carefully analysed before offloading shares.

"The government has responsibility for infrastructure development and there are many example of market failure in different economies," he said.

Had the entire sector become commercial, there would not have any problem in offloading share to the private sector, but that is not the case in the country, he explained.

"Desco becomes profitable at the cost of the PDB as the board is buying on an average at Tk 2.7 per unit from the power producers and selling it at Tk 2.45 to the Desco," he said.

Annually, the power company is making a profit of Tk 600 million but PDB is incurring a loss of Tk 5 billion, he added.

"A handful of shareholders of Desco may be happy that the company is making profit, but it is at the cost of development of the whole power sector," Mr Kabir said.

The PDB chairman pointed out that the companies might face expansion problem if the shares are offloaded.

"A listed company is liable to its shareholders and they will not allow any expansion if the company incurs loss, whereas if it is owned by the government it can take decision to expand for the need of the people," he explained.

The 12 companies are Liquified Petroleum Gas Ltd (LPGL), Padma Oil Company Ltd, Bakhrabad Gas Transmission, Gas Transmission Company, Jalalabad Gas,

Paschimanchal (Western) Gas Company, Sylhet Gas Fields Company, Bangladesh Gas Fields Co, Rupantarito Prakritik Gas, DPDC, PGCB, Rural Power Company Limited.