The Ministry of Shipping is seeking a port channel maintenance fee against the transportation of imported coal for the country’s thermal power plants. All port authorities in the country have requested this fee to maintain the navigability of the channels. A power plant authority is even unable to unload coal from a ship that recently docked at the port due to the non-payment of this fee.

Power plant officials state that if a port channel maintenance fee is collected for coal transportation, the production costs for thermal power plants will increase. An increase in production costs will subsequently have a negative impact on electricity prices at the consumer level. According to them, the country’s port channels lack the required navigability. For this reason, coal must be transported and unloaded from large ships onto smaller, lighter-age vessels. This results in higher expenses for the power plant authorities. Under these circumstances, if the port maintenance fee must be paid, there will be no alternative but to increase electricity prices at the consumer level.

A senior official of the Power Division reported that late last week, a ship carrying 56,614 metric tons of coal anchored at Payra Port for the 1,320-megawatt thermal power plant constructed in Kalapara, Patuakhali. However, the port authority prevented the ship from unloading the coal, demanding $7.71 per ton as a maintenance fee to preserve the channel’s navigability.

The Kalapara thermal power plant in Patuakhali was built as a joint venture named RPCL-NORINCO International Power Limited (RNPL) by the Chinese construction firm NORINCO International Cooperation Limited and the state-owned Rural Power Company Limited (RPCL). The plant’s first unit is scheduled to begin commercial production next March. The second unit will enter production next June. Relevant officials noted that a 660-megawatt unit of the plant will be connected to the national grid next week; however, as the coal unloading issue remains unresolved, this process may be delayed.

In light of this situation, RNPL Managing Director Md. Selim Bhuiyan sent a letter to the Chairman of the Payra Port Authority last Sunday, requesting permission to unload the coal without the channel maintenance fee. In the letter, he mentioned that the Bangladesh Power Development Board (PDB) had been contacted for a decision regarding the payment of the channel maintenance fee. As no final decision has yet been received from the PDB, they expressed a willingness to unload the coal by paying all other fees, excluding the channel maintenance fee. The letter further stated that if the port authority orders a halt to the coal unloading operations due to the non-payment of the channel maintenance fee, RNPL will require compensation, which would be considered a state loss that will ultimately be passed on to the consumer level in the form of higher electricity prices.

In response, a letter signed yesterday by Payra Port Authority Deputy Director (Traffic) Azizur Rahman informed the RNPL Managing Director that permission to unload the coal cannot be granted prior to the payment of the prescribed channel maintenance fee. An inter-ministerial meeting will soon be held to decide on this matter.

RNPL Managing Director Md. Selim Bhuiyan told Kalbela, “We have brought the coal but are unable to unload it. I have informed the Power Secretary about the issue. He has spoken with the Shipping Secretary. We have requested permission to temporarily unload the coal by paying the other fees, excluding the channel maintenance fee.”

He added, “Paying the channel maintenance fee will increase our costs. This is because the current navigability of the Payra channel is 5.9 meters. Consequently, ships with a capacity of 40,000 to 50,000 tons are unable to enter. Large ships must be anchored mid-sea, and the coal is unloaded using lighter age vessels. This incurs a cost of $8 per ton. If we now have to pay the maintenance fee, the cost will double. And if this added expense persists, electricity production costs will rise. As a result, electricity prices at the consumer level may also be increased.”

A senior official within the Power Division stated that discussions regarding the issue are ongoing between the Power Division and the Ministry of Shipping. Previously, in May of last year, the Ministry of Shipping published a gazette regarding the collection of this fee. Consequently, if this fee is collected, there will be no alternative but to raise electricity prices. For this reason, we are continuing discussions on the matter with the Ministry of Shipping. We are hopeful that an inter-ministerial meeting will take place this month to address the issue. Even after that, if the channel maintenance fee remains in effect, either electricity prices will have to increase, or the PDB will have to absorb the losses.

An RNPL official noted that there are plans to bring 60 to 72 coal-laden ships for the Patuakhali power plant in the current fiscal year. Based on this projection, Tk 360 crore will need to be paid annually as a channel maintenance fee.

Before this, during an inter-ministerial meeting held on November 19 to discuss the collection of the channel maintenance fee, chaired by Senior Secretary of the Ministry of Shipping Mohammad Yusuf, a decision was made to pay Tk 839.65 crore to the Payra Port Authority as a channel maintenance fee against the Payra Thermal Power Plant, owned by the Bangladesh-China Power Company Limited. The Payra Port Authority claimed this amount as the channel maintenance fee for the periods from January 1 to March 31, 2023, and from April 1, 2023, to November 6, 2024. Additionally, the Chittagong Port Authority has claimed Tk 400 crore as a channel maintenance fee against the Matarbari Thermal Power Plant.