Summit Group recently responded to allegations made in a white paper commissioned by the interim government in Bangladesh. In a detailed news release, Summit Group’s leadership, headed by Chairman Muhammed Aziz Khan, offered meticulous “clarifications” to the report’s findings. At the same time, Summit Group leadership extended an invitation to the committee working on the white paper to meet with Summit representatives and discuss the report’s findings in more detail.
The “White Paper on the State of the Bangladesh Economy” seeks to provide an assessment of the country’s current economic state, as well as past actions of the previous government. The paper is the product of a 12-member committee created by the interim government, which is led by Muhammad Yunus and took power in August 2024.
The paper isn’t an official report from the government; rather, it is a series of findings and recommendations. The paper states that while it is commissioned by the government, “the authors of the white paper remain exclusively responsible for its contents. At the same time, the government remains free to pick and choose the policy suggestions offered in the report.”
Summit Group, founded in 1985 by Bangladesh native Muhammed Aziz Khan, is the largest independent producer of electricity in Bangladesh. The company built Bangladesh’s first power plant. Khan says Summit Group’s role in bringing electricity to Bangladesh is one of the most important accomplishments of his life.
“Twenty percent of the people had access to electricity in 1995-96,” said Muhammed Aziz Khan. “Today, 100% of people have access to electricity in Bangladesh. That I was party to it — that Summit was part of it — is the biggest satisfaction.”
However, the white paper is, in part, critical of companies that have done business in Bangladesh when the former government was in power.
Summit Responds to Allegations on Tax Issues
Summit Group is the largest infrastructure conglomerate in Bangladesh and employs more than 6,000 people. The company has investments in the energy sector, ports, logistics, and information technology. All power-related operations for Summit Group are run by Summit Power International Limited, founded in 2016. SPIL has 18 power plants in operation or under development in Bangladesh.
SPIL also operates Bangladesh’s second floating storage and regasification unit and liquefied natural gas import terminal.
One of the findings in the white paper is that Summit Group enjoyed tax exemptions on income from power-generation projects. In its news release, Summit Group said these were part of a broader policy initiative by the Bangladesh government that applied to the entire power and energy sector.
The policy, Private Sector Power Generation Policy of 1996, states: “The government of Bangladesh recognizes that the pace of power development has to be accelerated in order to achieve overall economic development targets of the country and avoid looming power shortages. Power is the prime mover.”
The policy included sectorwide tax incentives to attract private investment in power projects, including direct foreign investment, because the government recognized “the likelihood of securing such a substantial volume of investment for power generation alone through the public sector is remote,” according to the policy.
Summit Group Answers Allegations About Fuel Used at Power Plant
The white paper also alleged that some of Summit Group’s contract conditions changed after contracts were awarded, using fuel use at the Summit Meghnaghat 335 dual fuel power plant as an example. Specifically, the report alleged Summit Group switched from heavy fuel oil to high-speed diesel without changing capacity payment or heat rate.
However, Summit Group noted that the Bangladesh Petroleum Corporation, the supplier of energy oil, could not supply the heavy fuel specified in the original agreement and “reached an understanding” with the Bangladesh Power Development Board to supply alternative oil.
“In order to maintain operations and fulfill its commitments, Summit Meghnaghat was obliged to accept this change but remains prepared to accept oil in accordance with the original tender conditions,” the news release stated.
Summit Group also denied allegations of marketing rigging on Bangladesh’s Dhaka Stock Exchange, something the paper said happened with 83 companies. The news release said Summit “has always conducted its affairs with the highest levels of corporate governance. Its Board of Directors comprises eminent and well-respected corporate figures. At no time has the company ever engaged in market rigging.”
Weaknesses of the White Paper Report
The Financial Express, an English-language daily newspaper in Dhaka, provided an overview of the white paper. While noting that it provides insight into the economic challenges Bangladesh faces, it also found many weaknesses.
For example, the Express noted that the report compiles extensive data but lacks transparency regarding data collection methods, selection criteria, and validation processes. It also omits numerous studies from international organizations like the International Monetary Fund, the United States Department of Agriculture, and the World Economic Forum that highlight Bangladesh’s social and economic progress.
Additionally, the report overlooks social progress, such as advancements in areas like food production, infant and child mortality rates, gender parity, life expectancy, and disaster risk management, according to the Express. It notes that the report estimates corruption losses of as much as $24 billion in development projects over the past 15 years, based on a single study that included many smaller projects but excluded some “large and mega projects.”
For its part, Summit Group continues to advocate for more electricity-related projects, recently urging the government to reconsider terminating the country’s third floating storage and regasification unit project. Summit has already committed $20 million to the project.
In the news release, Summit Group said it remains committed “to contributing meaningfully to Bangladesh’s growth and prosperity. Our operations in Bangladesh have consistently adhered to all regulations, and we take pride in upholding the highest standards of integrity and governance.
“Being a dependable partner in nation building, we remain open to dialogue with all stakeholders. We invite committee members preparing the white paper to engage and seek clarification where needed. As a substantial foreign direct investor, the Summit Group has always conducted its affairs in a transparent manner while striving to support the long-term development of Bangladesh.”