United Group, a major private power producer in Bangladesh, is facing mounting scrutiny over its failure to pay gas dues amounting to Tk 955 crore to state-owned Titas Gas Transmission and Distribution Company Limited (TGTDL) and Karnaphuli Gas Distribution Company Limited (KGDCL).
The group's subsidiary, United Power Generation and Distribution Company Limited (UPGD) , operates two gas-based power plants located in the Dhaka and Chittagong Export Processing Zones (EPZs). Despite supplying electricity to industrial customers and feeding surplus power into the national grid, UPGD has long refused to pay gas bills at the captive rate, as mandated by the government.
In response, the Ministry of Power, Energy and Mineral Resources has ordered the Power Development Board (PDB) to supply electricity directly to factories in three EPZs and disconnect UPGD’s gas connections.
While Titas Gas has already cut off supply to United Power’s DEPZ plant and recovered part of the dues, Karnaphuli Gas remains inactive, raising concerns among officials.
Background of the plants
According to sources from PDB, Petrobangla, Titas, KGDCL, and other agencies, UPGD established two gas-based power plants:
DEPZ Plant : Installed capacity of 35 MW in December 2008; now expanded to 86 MW.
CEPZ Plant : Initially 44 MW when commissioned in August 2009; currently generating 72 MW.
Electricity generated at both plants is supplied to local industries within the EPZs, to PDB via the national grid, and to external commercial clients. Titas supplies gas to the DEPZ plant, while Karnaphuli Gas supplies the CEPZ unit.
However, despite selling power commercially, United Power continues to pay gas prices at the IPP (Independent Power Producer) rate, which is significantly lower than the captive power rate applicable for self-used or privately distributed electricity.
Gas pricing disparity
Under current policy, gas prices are categorised as follows: Tk 14.75 per cubic metres for IPPs, Tk 30.75 for old captive power plants and Tk 42 for new captive power plants.
Petrobangla Director (Operations and Mines), Engineer Md. Rafiqul Islam, confirmed that LNG imported for domestic use costs between Tk 65–70 per cubic metre, adding pressure on state-owned gas companies.
Legal battle over rate classification
A confidential note from the 233rd board meeting of KGDCL, held on June 19, revealed that United Power was initially registered as a captive power customer in 2009 but later obtained an IPP license in November 2009.
In January 2018, the Energy and Mineral Resources Division issued a directive stating that gas used to generate electricity sold to PDB should be billed at the IPP rate, while gas used for internal or private distribution must be charged at the higher captive rate.
Based on this, KGDCL issued a revised demand notice in May 2019 , asking UPGD to settle outstanding dues calculated at the captive rate. The company challenged the notice in court.
The High Court dismissed the writ petition in November 2021 and the Appellate Division rejected stay petitions. The final dismissal came on February 8, 2024, by the Supreme Court’s Appellate Division.
Despite losing all legal battles, UPGD has not paid the outstanding Tk 425 crore 80 lakh 829 as of March 2025.
Titas takes action, Karnaphuli lags behind
Following ministry directives, Titas Gas disconnected United Power’s supply in DEPZ earlier this year. In response, UPGD paid Tk 50 crore toward its Tk 529.7 crore outstanding debt.
Titas Gas Managing Director Shahnewaz Parvez told Jago News, “We had a long-standing issue with United Power regarding gas pricing. Now they have deposited Tk 500 crore, and the rest will be collected in instalments. From now on, they will also pay future bills at the captive rate.”
Meanwhile, Karnaphuli Gas has yet to take similar action against UPGD despite issuing a letter to the CEPZ authorities on June 25 urging collection of dues. Calls to KGDCL Managing Director Md Salahuddin went unanswered.
Engineer Md Rais Uddin Ahmed, General Manager (Marketing-South) at KGDCL, said, “The ministry is handling the matter. A board decision was made to disconnect supply if payment isn’t received. However, disconnection will only happen after alternative electricity arrangements are made in CEPZ.”
Dual electricity supply in CEPZ
CEPZ Executive Director Abdus Sobhan clarified that the zone receives electricity from both PDB and United Power. He said, “We collect electricity payments from industries and pay both PDB and United Power monthly. We have no arrears to United Power for electricity supply.”
He added that UPGD supplies around 45 MW out of its total 65-70 MW generation to CEPZ, with the remainder going to Karnaphuli EPZ.
United Group’s defence
When contacted, Md Shamim Mia, Head of Public Affairs at United Group, argued: “Our plants in DEPZ and CEPZ are classified as IPPs under existing agreements. We continue to pay gas prices at the IPP rate. There is no mention of captive rates in our contracts. The new demands include clauses to amend the agreement, which we have not accepted yet.”
He also pointed out that the High Court did not declare them as captive users or order payment at the higher rate.
Ministry oversight
Petrobangla Director (Finance) AKM Mizanur Rahman confirmed that the ministry has directed both Titas and Karnaphuli Gas to take necessary actions, including disconnection, after arranging alternative electricity supply in the EPZs.