In a country where land for agriculture is rapidly shrinking, electricity can pl ay a vital role to create new employment opportunities

and simultaneously help i n increasing agriculture production, scientific preservation of the produce, the ir storage etc. The role of electricity in this country is relatively more vital than in many ot her countries where population pressure is not so high, land suitable for agricu lture is still available, sweet water is not so scarce, unexploited natural reso urces are awaiting development, and cyclones and other natural disasters are not so frequent. From the news in the electronic and print media it is clear that a large percent age of time, energy and attention of the two most important persons, the prime m inister and the finance minister, is spent on trying to improve and develop the power situation. Of course, energy and power are important and the most important people are payi ng due attention to ameliorate the sufferings of electricity consumers. Intensiv e and extensive efforts being made by the government are producing good results. However, it is probably a suitable moment to seriously consider whether we can do better so far as electricity is concern. Electricity is an industry with its own peculiar nature. The product cannot be k ept stored for marketing at a later date or time. Production, transmission and d istribution are made instantly whenever a consumer pushes an electric switch dem anding supply. Online starting of large induction motors is quite common. This o bviously requires availability of substantial reserve capacity to satisfy instan t demand. Creation and maintenance of considerable reserve margin is rather expe nsive, requiring additional investment in this capital-intensive industry. Introduction and regular adjustment of electricity tariff to be charged for supp ly to the consumers, correct and appropriate metering, regular billing, prompt c ollection of billed amount, systematic reporting of billing and collection situa tion through MIS are essential for financial solvency of this industry. Fixed and variable costs plus a reasonable rate of return on investment are defi nite basic requirements. Again the accounts receivable cannot be allowed to incr ease beyond set limits. Huge amount outstanding in the shape of accounts receiva ble causes cash flow problems and delay in payment of outstanding fuel bill, mee ting debt service liability etc. Most of the investment, either by the public or the private sector, needed to cr eate capacity in generation or in transmission and distribution of electricity i s borrowed from the public treasury through subsidiary loan agreement or other r ecognised methods from different financial institutions. Those are to be paid ba ck regularly at the agreed terms and conditions. Outstanding huge amount as debt service charges cause a sense of financial misma nagement and create problems for the lending institutions, whether it is the gov ernment or any other institution. There is an overwhelming impression that to overcome the present crisis we must add new generation capacity both in the public and the private sectors. Consider able success is being achieved to that end. But marginal increase in power gener ation capacity, where availability of supply of fuel is so very difficult and so mewhat uncertain, can hardly keep pace with steep increase in demand in this pow er hungry situation. Again supply creates its own demand and meeting additional demand would create more problems. Once power generated by the private and public sector is supplied to the grid, t hey must be paid as per terms and conditions of power purchase agreement. Delay in payment may make the private power producers financially insolvent. Thereby, they may be discouraged from making further investment in this sector, which is so urgently needed. The present metering, billing and revenue collection systems are not adequate en ough to generate the required cash flow to meet additional requirement of funds. A very large percentage of meters installed at the premises of electricity cons umers are either defective or do not work at all. Billing and collection are far below the desirable level. These problems need urgent solution to create and sustain a sound and stable ele

ctricity system so urgently needed for development and welfare of this country. Involvement of the private sector in the electricity sector is not new. As a mat ter of fact, it is the private sector which so courageously started electricity industry in this country. It was the British who started electricity generation and distribution at the Nawab Abdul Gani Road with two small generators many yea rs ago. It was the foresight of Mr. R.P. Shaha and the British that was responsible for electricity generation and distribution in Naraynganj, Chandpur and Dhaka. They were the pioneers of electricity industry in what is now Bangladesh. The then go vernment came forward to create electricity directorate in 1948. Now a grid syst em has already been developed. To solve the present gigantic and numerous problems of the electricity industry, the private sector must again be involved to play the leading role. The public sector does not have the flexibility needed to overcome the crisis situation. Our industries must be fed with reasonably reliable supply of electricity. New i ndustries must be encouraged with assurance of required supply of electricity. I t is interesting to note that the numbers of such consumers are only a few thous and, and they are concentrated conveniently in four or five areas of the country . Those industries that require power are in the best position to produce, trans mit and supply their own power requirement. They can adjust electricity tariff as required, and prepare bills and collect re venue to meet their requirements. We can start with an area in Dhaka and in Chit tagong where most of the industries are located. Haphazard addition of small gen erating capacity here and there will not solve such a gigantic and acute problem . Necessary discussions with industrialists and business organisations could be th e starting point. The public sector would start the process, assist the private sector and gradually withdraw from the sector from load concentrated areas. Dhak a and Chittagong need to be the main focus. The government can lay down some statutory rules and regulations to protect its investments and public interest. It is simply not possible for the government or the public sector to be flexible enough to become efficient in running a self-sustaining electricity system. Sup plying of electricity to every consumer is not the present priority in this reso urce-constrained country, where fuel supply is so very difficult. Many persons s uggest importing coal to generate electricity. Asian giants like China and India have already booked most of the coal resources of exporting countries nearby, l ike Australia and Indonesia. The present efforts can continue. However, the short and long term plan demands gradual involvement of the private sector, not only in small generation projects but also in transmission, distribution and sale of electricity. As a mater of f act, each private sector entity maybe entrusted with the entire responsibility o f electricity production and supply in selected areas where electricity demand i s concentrated in the shape of industries. They are the primary sources of emplo yment and value addition. Shamsul Islam is former Chairman, Bangladesh Power Development Board