Questions Over 'Profit Bonuses' at Subsidy-Run Power Companies, With a Feared Tk 300 Crore Annual Loss

The government has to provide huge subsidies to meet the cost of generating electricity. Yet the Power Division has questioned how that state support is treated in the companies' accounts. Because the money given by the government is not counted as a company liability, room is created to show a profit — and that profit is even being distributed as a "profit bonus".

The Power Division has given its opinion against paying this bonus. The issue was mentioned in a Power Division letter in April 2025. But officials say that unless the Power Division issues fresh instructions, the profit will have to be paid under the amended labour law.

Those concerned say dividend distribution was ordered to stay suspended in January 2026. But with the labour law amendment passed, the withheld profit now has to be paid. That could cost the government at least Tk 300 crore every year.

At present the PDB sells electricity at the wholesale level at an average of Tk 8.39 per unit, against a generation cost of Tk 12.91. That is a shortfall of Tk 4.52 per unit, which the government must cover through subsidy. On that basis, the annual subsidy in the power sector is about Tk 62,000 crore. In this situation, whether the subsidy is properly reflected in how the state-supported companies determine their profit is now the big question.

A Power Division order of 27 April 2025 said the distribution of profit among officers and employees of Bangladesh-China Power Company Limited (BCPCL) had come up for discussion. The companies are not treating the money received from the government as a loss liability; instead, their officers and employees are receiving profit. The matter had earlier been discussed at a meeting on 16 April the previous year.

Then, on 27 January this year, the Power Division ordered, in another directive, that until further notice, state-owned companies under the Power Division that run directly or indirectly on government subsidy, and companies established under government-to-government (G2G) joint partnerships, must not distribute dividends to officers and employees while the subsidy continues. It also said no dividend should be distributed before repaying foreign loans taken under facility agreements. But many companies in the power sector are reportedly not complying with the instruction.

The previous interim government was strict about not paying profit bonuses, but the ordinance was issued without including the matter in the labour law amendment. The ordinance was passed in parliament on 10 April under the current government. Because the labour law contains a provision for profit sharing, the rules now allow 5 percent of profit at the prescribed rate to be deposited into the Workers' Profit Participation Fund and related funds. As a result, officers and employees are due to receive the profit.

Five state companies in the power sector distributed about Tk 96 crore in profit among officers and employees in the 2023-24 fiscal year. Of that, North-West Power Generation Company gave about Tk 37 crore, Ashuganj Power Station Company Tk 26.81 crore, Electricity Generation Company of Bangladesh Tk 16.77 crore, Rural Power Company Tk 9.84 crore and B-R Powergen Tk 5.62 crore. Beyond these there are also government gas companies and joint-venture companies; the joint ventures' profit has not yet been distributed.

Energy expert Professor Shamsul Alam said: "Why should these service institutions under the government be in a profit-and-loss calculation at all? They are meant to serve the people. The companies buy at a high price and sell electricity at a low price, so the government gives them subsidy because they make losses. On the other hand, as companies they pay profit bonuses. If an institution actually makes a profit, why should the government subsidise it? This is a kind of plunder. The government is assisting this plunder with subsidies. And that burden falls on the people." He added: "This is an abuse of state power. In many state institutions, profit bonuses have been stopped after protests. For example, Maddhapara Granite Mining no longer pays profit bonuses." He believes this plunder must be stopped.

Former Power Cell director general and energy expert B. D. Rahmat Ullah said: "This needs to stop immediately. They say they are making losses, so they must be given subsidy. Again, they themselves are paying profit bonuses to company officers and employees. One does not match the other. Subsidies are given with our — the people's — money, and again that money is recovered by raising our electricity prices. The government should identify these and stop them. Past governments did this too. That continuity is still going on." However, no official of the companies concerned agreed to speak about the allegations.

Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmud said: "I have been working on this since I took charge. This plunder started during the Awami League era. They left behind so many problems. It is like 'the whole body aches, where do I apply the medicine'. We are working not only on electricity but on the other companies too."