The crisis is deepening. One need not be a researcher to grasp the severity of the power shortfall likely to unfold in the coming summer. The Iran conflict has triggered a global energy crunch, and in Bangladesh the outcry over fuel oil has become a daily reality. There is little indication that the fuel shortage will ease any time soon. Among fuel oils, diesel remains in highest demand and is the principal source of concern. Although the government is attempting to import diesel from alternative sources, demand is expected to surge during the forthcoming Boro cropping season, placing further strain on power generation. As a result, the BNP government – having assumed office less than two months ago – is confronting an acute crisis in both energy and electricity.
Experts argue that corruption was most pervasive in the power sector during the Awami League era. Under the Prof Yunus-led administration, not only was there no proper investigation into these allegations, but the situation reportedly worsened due to claims of misconduct involving the then energy adviser. There are also accusations that the previous interim government sought to benefit unlawfully rather than taking steps to annul unfair agreements.
After assuming office, the Yunus administration pledged to investigate corruption in the power sector, yet little progress was made over eighteen months. An audit committee was eventually formed to examine irregularities and submitted its report in November 2024.
It gathered evidence that could support revising or cancelling contracts under international arbitration law. The committee recommended the immediate appointment of leading international legal and investigative agencies to ensure the inquiry met global standards. Projects under scrutiny included the Adani Group’s 1,600 MW coal-fired plant in Godda, India; the 1,320 MW Payra plant in Patuakhali; the 335 MW Meghnaghat dual-fuel plant; the 195 MW Ashuganj gas plant; the 612 MW Banshkhali coal plant (Unit 1); Summit Group’s 583 MW dual-fuel facility in Meghnaghat; and Unique Group’s 584 MW LNG-based plant, also in Meghnaghat.
In 2010, the then Awami League government enacted the “Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act” to address power shortages. Initially intended as a two-year measure, it was extended three times and remained in force for 14 years. Numerous projects were undertaken under this law, which permitted the procurement of power and fuel and the construction of infrastructure without competitive tendering. It also barred legal challenges in court, earning it the label of an “Indemnity Act”.
It is alleged that the Awami League government used this controversial legislation to carry out widespread irregularities and corruption, funnelling large sums of money through preferential contracts awarded to select companies. According to the Bangladesh Power Development Board (BPDB), around 91 private and rental power plants were established under the act, with a combined capacity of approximately 11,700 MW. Many of these facilities remained idle, even as the government continued to pay billions in “capacity charges” annually – prompting strong criticism.
On 5 September, a committee led by retired High Court Justice Moyeenul Islam Chowdhury was formed to review these agreements. It was empowered to collect information from any source, audit documentation, and summon individuals or institutions to determine whether national interests had been safeguarded. The committee sought details on 11 power plants, including those involving Adani, Summit and Beximco. Notably, the 25-year agreement with Adani Power, signed on 5 November 2017, was reportedly concluded in secrecy. Its terms require BPDB to pay for 34% of the electricity even if there is no demand, while also purchasing coal at inflated prices. The 1,320MW Payra Thermal Power Plant – a joint venture with China costing Tk19,550 crore – was also under review. Yet, for reasons that remain unclear, the interim government neither cancelled nor initiated the cancellation of these contracts.
Following the 12 February elections, the BNP formed a government and appointed Iqbal Hasan Mahmud as Minister for Power, Energy and Mineral Resources. Shortly after taking office, he described the power purchase agreements with foreign and private entities – including those with India – as a serious threat to the country’s independence and sovereignty. He stated that the previous government had ignored national interests and entered into “one anti-state agreement after another”.
The Minister maintained that the BNP’s policy has always been to strengthen domestic capacity. He argued that importing electricity despite sufficient local generation capability undermined national sovereignty. He announced that all such agreements, including the Adani deal, are under review, stressing that the new administration would prioritise public interest and act against any contract deemed contrary to national interests.
It is important to note that any sovereign state has the right to reassess agreements with other nations. Democratic systems provide mechanisms for such scrutiny. In India, for example, such deals can be debated in Parliament, where the Speaker may establish a special committee; even confidential agreements can be examined. The Supreme Court of India also has jurisdiction to review and annul agreements that conflict with national interest.
There are numerous precedents. India’s 1993 Longju Agreement with China was never implemented due to strong parliamentary opposition. The 1974 Enclave Exchange Agreement with Bangladesh took 37 years to materialise because it was not ratified by the Indian Parliament until 2011. Likewise, the 2008 Indo-US Civil Nuclear Agreement was debated in the Lok Sabha and amended. In the United States, Congressional committees review treaties, while the United Kingdom has comparable parliamentary oversight. This is standard practice in democracies. Ultimately, the people are the true custodians of the republic, and their elected representatives have every right to scrutinise agreements affecting public interest.
As a consequence of these unfavourable power deals, Bangladesh is compelled to pay thousands of crores in subsidies – funds drawn directly from taxpayers. No government has the right to squander public money in this way; it amounts to a form of plunder.
The country now has an elected government and a functioning Parliament, which in a parliamentary democracy is sovereign. The government must therefore proceed with a long-term strategy for the power and energy sector. This should begin with an immediate and thorough reassessment of all past contracts, overseen by a dedicated parliamentary committee tasked with examining each agreement. Where deals are found to undermine national interest, the committee should recommend their cancellation to Parliament for a final decision.
Alongside this, a judicial commission led by the Supreme Court should be established to examine both the financial and legal dimensions of these agreements. Its role would be to identify inconsistencies and ensure that any cancellation or amendment does not result in legal entanglements or excessive compensation claims.
At the same time, diplomatic decorum must be maintained. Any renegotiation or cancellation of contracts should be handled carefully so as not to damage relations with partner countries. Unlike the previous interim administration, which employed undiplomatic rhetoric without ultimately cancelling agreements, the present government must proceed through constructive dialogue.
Finally, the government must be prepared for adverse outcomes. The termination of contracts could lead to international arbitration, and it is essential to anticipate this by engaging international legal experts and firms in advance to navigate potential disputes.
There is no magic solution to the power crisis, nor any quick fix. However, the government must demonstrate its commitment by curbing waste in the sector and pursuing sustainable, cost-effective solutions.
Bd-pratidin English/ ANI
