REB to suffer Tk1,400cr loss if retail prices are not raised

Rural Electrification Board is expected to lose around Tk1,400 crore in the current fiscal year if its retail prices are not raised. The REB is supplying power to residential houses, irrigation pumps and charitable organisations, which make up 92% of its all consumers, at Tk4.62 per unit although the cost of that power is Tk6.78. The rest of the consumers, who include commercial enterprises and industrial units, are however buying the power at a bit higher price. The REB purchases electricity from Power Development Board (PDB) and supplies that to the consumers through Palli Bidyut Samity (PBS). There are 80 such associations or PBS in the country. Ninety per cent of the REB consumers are residential houses and over half of them are classified as “life-line” who are paying only Tk160 for an average consumption of 35 units per month. After the new tariff was announced by the Bangladesh Energy Regulatory Commission (BERC) on September 01, 2015, the REB's net loss stood at Tk511 crore in the fiscal year 2015-16 and Tk880 crore in the FY2016-17, said an REB director asking not to be named. He said the total losses in the two financial years amount to Tk1,391 crore. Before the announcement of the latest tariff in September 2015, a number of 22 PBS were in good condition, but the number has now fallen by half to 11. In the FY2017-18, the loss is expected to rise to around Tk1,400 crore. However, a public hearing is scheduled on September 27, 2017 at the BERC office to revise retail prices of electricity. Officials said if the retail prices are not raised, it will be impossible for the government to pay dues, salaries and allowances of the employees and electricity bills of the PDB. The REB is assigned to provide electricity to all the people in the country by 2018 to implement the Vision 2021 announced by the current government led by Prime Minister Sheikh Hasina. To this end, the REB has laid 351,000 kilometers distribution lines and 799 sub-stations with capacity of 9,010 MVA, supplying electricity to 20m consumers. “If we can achieve 100 percent electrification, it will improve socio-economic status of the country. And to reach that goal, it is essential to increase electricity prices at retail level,” REB Chairman Major General Moin Uddin told the Dhaka Tribune.