Chinese authorities embargo coal import for Pyara power plant

Coal found in Khagrachhari.

Jehangir Hussain

The Chinese Foreign Exchange Control Authority has imposed an embargo on CMC on coal import for the Bangladesh-China Power Company (PVT) Limited, known as Payra 1244 MW power plant as it failed to pay $US 298 million dollar, coal import bill for the plant for nine months. 

“We have only 15 days stock in our hand to run the plant, we apprised the situation to all level, however, we have nothing to do alone as the issue id dollar,” Engineer AM Khorshedul Alam, Managing Director of Bangladesh-China Power Company said. 

Failure to pay the instalment in several months, which finally make the authorities ineligible to get credit support from the lender – the Export-Import Bank of China, which gave embargo on CMC.

We need 10,000 tonnes of coal per month to run its operation, however, all are imported from Indonesia, he said.Bangladesh-China Power Company (PVT) Limited failed to pay its nine months bill which amount $US 298 million.

According to the Power development Board (PDB), China has 50 per cent ownership at Payra power plant. According to an agreement between CMC and PDB, the CMC procure coal from Indonesia for this plant and enjoy six months “deferred payment” facilities. 

“We are trying to pay $US 50 million as soon as possible to manage the LC dispute, we hope the situation would be ease very soon,” a senior official of the PDB said.

According to sources, mainly due to the dollar crisis, the Bangladesh Bank was in a tough position to open Letters of Credit (LCs) for the import of coal.

Meanwhile, on April 23, the power generation at Rampal thermal power plant in Bagerhat has come to a halt due to a coal shortage.

Anwarul Azim, deputy general manager of Bangladesh India Friendship Power Company Ltd, said the production of the plant has been stopped since the night of 23 April due to a coal shortage.

"Measures have been taken to import coal. We hope to be able to resume production by 3 May," he added.

Power generation from Barapukuria coal power plant has also halted from Rampal thermal power plant stopped on 14 January this year due to a coal supply crisis. After the coal supply became normal one month later, it resumed operation.

The Bangladesh-China joint venture that has implemented the Payra 1,320MW Thermal Power plant is struggling to manage dollar to pay coal import bills and repay loans taken for the plant.

The Bangladesh-China joint venture that has implemented the Payra 1,320MW Thermal Power plant is struggling to manage dollars to pay coal import bills and repay loans taken for the plant.

Of that amount, $114 million is needed for the payment of the fourth installment of a loan, which the company failed to pay within the December 8deadline set by the lender.

AM Khorshedul Alam, managing director of Bangladesh-China Power Company, however said that they had the entire month of December to pay the installment and that Sonali Bank was settling the bill.

But, the loan installment remained unpaid till the end of the banking hour on Thursday, December 8, Sonali Bank sources said.

Explaining the rush at the eleventh hour, Khorshedul Alam said, "We used to pay the installments through Standard Chartered. But, recently Standard Chartered decided not to facilitate coal projects. Therefore, we had to shift the account to Sonali Bank which took some time."

The production of this mega project was stopped again on 15 April due to mechanical failure. The plant resumed production on the night of April 18 after a three-day shutdown.

jehangirh01@gmail.com