The New Nation - Internet Edition

Staff Reporter

The Asian Development Bank (ADB) yesterday asked the government to raise energy price and cut subsidy to the sector for bolstering the economy of the country. "Many of you may not like this proposal, but it is very important for Bangladesh economy," ADB country director Hua Du told newsmen after a meeting of the visiting ADB mission with Finance Adviser Dr Mirza Azizul Islam at his Finance Ministry office.

The mission chief said the government should increase the prices to ease the pressure on the economy brewing over the huge subsidies currently going to the energy sector.

Deputy director general of ADB's Private Sector Operation Department S. Chander led the three-member consultation mission on `Private Sector Project in Power and Energy'.

However, Hua Du, made it clear that it is government responsibility to find suitable time for energy price adjustment.

"The prices should be adjusted to some extent commensurate with the level of subsidy," she said, replying to a question.

The ADB country director said the subsidy policy should be transparent and the people, who could afford the price, should not enjoy the subsidy.

"I'm getting the subsidy; it's not right," she said, adding that the subsidy should go to a target group of people - the poor and the farmers.

She said the ADB mission had talks with the Finance Adviser on how the Bank could better work to support development of Bangladesh's energy sector - gas, power and coal.

ADB has already been involved in the power and gas sector development of the country while they are now interested to support the coal sub-sector development.

"We've discussed on a package in energy sector development project," Hua Du said.

Talking to reporters, Finance Adviser Dr Mirza Azizul Islam said they discussed about developing alternative source of energy amid scarce availability of gas to meet the increasing demand.

"We've only coal as alternative energy source," he said, adding that the government could not yet take decision in this regard as the coal policy, now under consideration of the government, could not be finalised yet.

Replying to a question, the Adviser said they have not had any discussion on adjusting the energy prices. "It might be her (Hua Du's) personal view."

He said the government would consider adjustment of the energy prices in appropriate time.

The power sector has received about $1.7 billion to improve the capacity and quality of power supply, and another 23 technical assistance grants totalling about $14.6 million.

ADB assisted Bangladesh in developing major gas fields (Titas, Habiganj and Bakhrabad), major transmission systems, and most of the distribution networks across the eastern part of the country, with over $676 million in loans and $5 million in technical assistance grants since 1975.