Stagnant BERC, reforms also without rhythm
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Stagnant BERC, reforms also without rhythm
If the Bangladesh Energy Regulatory Commission (BERC) is strengthened, more than half of the power and fuel sectors can be reformed. Sector stakeholders are not satisfied with the pace of strengthening BERC.
Although the interim government has been in power for 3 months, there has been little visible progress in the fundamental issues of BERC. The light of hope that Fauzul Kabir Khan, Adviser to the Ministry of Power, Energy and Mineral Resources, spread on the first day of taking office (the Special Provisions Act was suspended and the price determination of electricity and gas was canceled by executive orders) is fading out day by day.
On his first day at the ministry, he announced that there would be no more contracts under the controversial special law (the Immunity Act). All work will be done through open tenders. The adviser has kept his word, and even the pressure of many pressure groups could not sway him. He also showed his determination by rejecting the proposal of the American company Accelerate, which was waiting for a contract under the special law.
On the first day, he announced another milestone to strengthen BERC. He announced that the government would not adjust electricity and gas prices through executive orders, but BERC would set the prices. His initiative was widely praised, applauded by consumer organizations including CAB. Within a few days, the clause of adjusting electricity and gas prices was abolished through an executive order on August 27. Many were optimistic that the new BERC would become dynamic and strong. But even after 3 months, the obstacles to strengthening BERC still remain.
In 2003, the Energy Regulatory Commission was formed as a neutral and quasi-judicial institution through the passage of the Act. BERC, formed to ensure the accountability of gas and electricity companies and consumer rights, originally started its journey in 2009. So far, 13 regulations have been formulated. 12 of its regulations have been pending approval for more than a decade.
Although the law has the authority to determine the prices of all types of fuels, BERC has been determining the prices of only gas and electricity as regulations are pending. Section 34(3) states that BERC shall formulate regulations. However, there is a condition that the government can determine them by notification until the regulations are formulated. Since the petroleum regulations have not been approved, the price of fuel oil has been determined through notifications in a hurry. In 2023, the law was suddenly amended and a provision for price adjustment (lower/higher) was added to the executive order. Since then, the quasi-judicial institution has practically become unemployed as the prices of gas and electricity have been determined by executive order.
Sector-related people became optimistic about the initiative of the interim government. Many thought that the regulations would be approved this time. Initiatives were also taken from the Energy and Mineral Resources Division. However, even after 3 months, not much progress is visible.
BERC Chairman Jalal Ahmed told Barta24.com, the regulations were submitted to the ministry even before I joined. I am insisting on approving these after joining. However, the issue of combining the three separate regulations of fuel oil (distribution, transmission and retail sale) has come to the fore. We have sent the three together. I hope that approval will be obtained soon.
In addition to the regulations, there is a clear crisis in manpower. For this, a new manpower structure was created in 2017. In 2014, 200 more posts were created along with the 81 posts approved. The Ministry of Public Administration reduced it to 118. Two years later (in 2019), the Finance Department approved the appointment in two phases. Then another two years passed. In March 2021, the meeting of the Secretary Committee on Administrative Development approved 65 posts in the revenue sector. This mentioned 146 manpower including the previous 81 and the proposed 65 posts.
BERC prepared the distribution of responsibilities for the 146 posts. According to the instructions of the Ministry of Public Administration, the Prime Minister's approval is required for the creation of Grade-3 and above posts. Since there were 4 such posts, it was sent to the Prime Minister's Office on April 5, 2021. The Prime Minister did not approve it and sent it back asking for an explanation of the rationale. The manpower structure was again suspended. After the change in the political landscape, BERC sent it for the approval of the Chief Adviser on August 18. It has been almost 3 months but it has not seen the light of day. Due to which disappointment is increasing again.
On the other hand, after the fall of the Awami League government, Chairman Norul Amin and the members of the commission resigned in the face of the movement of officials and employees at all levels. The interim government appointed only the chairman. As 4 member posts of the commission are vacant, there is stagnation in the commission. It is known that many works are being hampered due to the lack of a full commission.
Former BERC member (administration) Mohammad Abu Faruk told Barta24.com that if BERC is reformed, half of the energy sector will be reformed. If it is given full powers according to the law, a lot of corruption will stop. In many countries, including India, to enter into any agreement, approval from the Regulatory Commission is required. If it can be done in our country too, then they will see whether it is really necessary or not, and whether the price is reasonable or not? If there is a domestic interest, they will approve it. It is possible to save thousands of crores of taka at the macro level.
Former BERC member Maqbul E-Elahi Chowdhury told Barta24.com, the biggest reform will be done if BERC is implemented. If BERC is strong, many corruption and irregularities will automatically stop. It is surprising why the regulations have not been approved even after 3 months.
CAB's Energy Adviser Dr. M Shamsul Alam told Barta24.com, we want to see BERC strong and effective in the future. So far, the government's position on the BERC issue has been very clear to us. They are also determining the price of fuel oil following the path of the previous government. They are speaking in the tone of the previous government. We are monitoring the situation, if necessary; we have obtained the order to announce the price of LPG. The CAB will not hesitate to walk that path on the fuel oil issue.
At one time, the companies used to determine the price of LPG, and when the CAB went to court, BERC was forced to do so.
Consumers said that there is an evil competition for profits among the distribution companies. It has also been seen that the staff of the company received profit bonuses of up to Tk. 18 lakhs per year. In these cases, they had to face some accountability in the public hearing of the BERC. That place was also closed. Public hearings played an indirect role in preventing corruption and waste of the companies. There was a fear that their irregularities would be exposed. But there is no such attention to strengthen that BERC.
