July 9, 2026
DHAKA – The government cannot cancel contracts signed with private power companies at will because they are backed by sovereign guarantees, making the process of termination lengthy and complex, Energy Minister Iqbal Hassan Mahmood said today.
Responding to a supplementary question from reserved seat MP Mardia Mumtaz in the parliament, the minister said the previous “fascist government” had handed over several power plants to private companies.
“In those agreements, sovereign guarantees were given, meaning the state itself guaranteed the contracts. Canceling such guarantees is a lengthy process. We are trying to negotiate with them on several issues, particularly late payment fees, which we are refusing to pay. Hopefully, these discussions will be fruitful,” he said.
He added that once a power plant enters production, the system cannot be patched or run through ad hoc negotiations.
“Therefore, as long as contracts remain valid, we will try to reduce prices and ensure electricity at affordable rates,” the minister said.
Replying to a question from Jamalpur-3 MP Mostafizur Rahman, Iqbal Hassan said no quick rental power plants are currently in operation and there are no active contracts with them.
However, he said two rental power plants had their contracts renewed after expiry on a “no electricity, no payment” basis and continue to operate under those arrangements. Since quick rental power plants are no longer operational, no capacity charges are being paid, he added.
Responding to a question from Mohammad Kamal Hossain MP, the minister said the country can currently supply about 2,700 million cubic feet of gas per day against a daily demand of around 3,800 million cubic feet.
As a result, Dhaka and other parts of the country are receiving significantly less gas than required, causing disruptions to supply.
Answering a question from MP Golam Rasool, the minister said transmission loss stood at 3.04 percent and distribution loss at 7.38 percent in FY2024-25.
Up to April of FY2025-26, transmission loss rose to 3.27 percent, while distribution loss declined to 6.29 percent.
Replying to a question from MP Mahbubur Rahman, the minister said international fuel prices have begun to decline following the end of the war involving Iran, the US and Israel.
However, he said prices remain above the break-even level despite the fall, leaving the Bangladesh Petroleum Corporation (BPC) to incur daily losses of Tk 78 crore from the sale of diesel, octane and petrol.
Between March and June 23, the BPC’s total losses amounted to Tk 18,699 crore, he said.
The minister added that if international fuel prices fall further to a sustainable level, the government will consider reducing domestic fuel prices to ease public hardship.
In response to a question from reserved seat MP Sabikun Nahar, Iqbal Hassan said two committees formed to review power purchase agreements under the Electricity and Energy Supply Enhancement (Special Provisions) Act, 2010, have submitted separate reports.
Necessary actions are being taken based on their recommendations, he added.