The High Court has declared the immunity provision in Section 9 of the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010. as illegal and unconstitutional.
A High Court bench of Justice Farah Mahbub and Justice Debashish Roy Chowdhury issued the ruling on Thursday.
The court had earlier heard a petition questioning why the immunity in Section 9 of the same act should not be declared illegal and unconstitutional, setting the ruling date for November 7.
The petition was presented by Dr Shahdeen Malik and Tayeb-Ul-Islam Showrov.
On September 2, the High Court issued a rule questioning the legality and constitutionality of the immunity provision in Section 9 of the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010.
Two Supreme Court lawyers had filed a petition challenging the validity of the immunity related to quick rental and the purchase provision in Section 6(2).
Section 9 of the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010, says no question shall be raised before any court as to the validity of any act, or any act deemed to have been done, any action taken, any order or direction given, under this act.
Section 6(2) of the act says that notwithstanding anything in sub-section (1), any procurement, investment plan, or proposal must be communicated and negotiated with a limited number or a single institution, as designated by the processing committee mentioned in section 5. The proposal must then be forwarded to the economic or government procurement cabinet committee following the procedure described in section 7.
The writ names the secretary of the Legislative Drafting Division of the Ministry of Law, the secretary of the Ministry of Finance, the secretary of the Ministry of Power, Energy and Mineral Resources, the chairman of Petrobangla, and the chairman of the Power Development Board as respondents.
Background on the Quick Rental Power Act
The Quick Enhancement of Electricity and Energy Supply (Special Provision) Act was enacted in 2010 by the Awami League-led government to address the country’s severe power shortage.
This legislation was intended to facilitate rental power plants with short-term contracts, initially set to last two years but extended multiple times since.
While the act boosted the power supply, helping to support economic growth, it also led to significant costs due to subsidies required to cover high-priced electricity generated by rental power plants.
As of June, Bangladesh’s dues to rental, quick rental, and independent power plants had reached Tk 10,000 crore.
In 2023, the Center for Policy Dialogue (CPD) suggested that scrapping contracts with quick rental power plants could reduce the burden of overcapacity on the power sector and ease energy costs for consumers.
Diesel and furnace oil-based plants, which are prevalent among rental power facilities, are notably more expensive; some plants require up to Tk40 to produce a single unit of electricity compared to an average of Tk11.5 across the sector.
Financial impact and criticism
In recent years, the power sector has faced criticism for the substantial public funds directed toward capacity charges, amounting to Tk 1 trillion over 14 years.
The government previously revealed that 32 rental power plants are among the recipients of these payments, with entities such as Aggreko International, Khulna Power Company Limited, and Summit Power Limited named among the top beneficiaries.
Environmentalists and experts argue that reliance on heavy fuel oil and diesel has further burdened taxpayers while contributing to escalating energy costs.
A coalition, the Bangladesh Working Group on Ecology and Development, highlighted the fact that in 2023, heavy fuel oil was four times more expensive than gas and over 37% costlier than coal for generating power.
