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PDB to become holding company, employees against the move

  • Published at 12:31 am March 26th, 2017
PDB to become holding company, employees against the move
The government has decided to turn state-owned Bangladesh Power Development Board (PDB), a loss-making and trade union-dominated enterprise, into a holding company by this year, though an earlier decision was to make it a corporation. On March 7, a letter signed by Power Division Senior Assistant Secretary Ireen Pervin was sent to the PDB asking it to make a timeline of action plan in this regard and update the power division. The power division’s letter followed a previous directive of prime minister in doing so. In February 2014, Prime Minister Sheikh Hasina had asked to breakup the power company and make it a corporation like state-run oil corporation Petrobangla for smoother power supply and turn the PDB into a profitable entity. Afterwards, the PDB in August 2016 had advertised for Expressions of Interest (EoI), which was responded by five consultancy firms. But the process saw little development from the government agency. When a company  holds majority of shares  such as  more than 50% of the equity shares of the another company, the first company is called a holding or parent company and the latter is called subsidiary company. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies. Hence, all domestic power companies including the newly formed North West Zone Power Distribution Company Limited, Dhaka Electric Supply Company Limited, Dhaka Power Distribution Company Limited, West Zone Power Distribution Company Limited,  North West Power Generation Company Limited, Ashuganj Power Station Company Ltd, Coal Power Generation Company Bangladesh Limited and Electricity Generation Company of Bangladesh will be controlled by the PDB, once turned into a holding company. However, PDB officials and employees are against the government move, which they fear will lead to specific financial and technical targets, including reduction of system loss, for the proposed company. A Power Division official, requesting anonymity, said: “The PDB’s conversion will cause a radical change in its management structure, mainly weakening the enterprise’s accountability.” PDB had incurred a loss of Tk3,500cr in last fiscal year due to mismanagement and lax accountability, he added. Zahirul Islam Chowdhury, president of Bidyut Sramik League and also a leader of Sramik Karmachari Oikya Parishad, said:“We will take measures after understanding it [concept of a holding company].”