The Power Development Board (PDB) is pursuing Installation of two new power units at Kaptaj Hydropower System at a cost Tk 200-250 crore higher than what some experts estimate. sources said.

With backing from a strong political lobby and approval

from the Energy Ministry, PDB is pursuing the project on the basis of an unsolicited negotiation with a Japanese firm on the plea that competitive bidding would delay the project by at least 18 months.

The political lobby has already convinced officials con-

cerned to give the project a green signal, sources in PDB claimed.

The proposal was sent to the ECNEC In March for approval. Bui ECNEC sent It back on the ground that It "sounded too costly" It will be sent to the ECNEC again, sources In PDB

said.

PDB recommended a sky-high budget of 15800 million Yen (Tk 710 crore at current rate) for the proposed gas-fired Kaptal-6 and Kaptal-7 plants, each with 50 MW capacity

But some experts In PDB said h 50 MW land-based gas-fired

unit should cost much less than Tk 200 crore.

Citing examples, they said the 100 MW gas-fired land-based power plant at Baghabari is being built at a cost of Tk 123 crore. Three bidders had quoted Tk 123 crore to Tk 190 crore for the plant.

PDB itself has set up a 60 MW unit at Shahjibazar at the cost of around Tk 140 crore.

"Even'if the new plants at Kaptai require some additional Infrastructure In water, the cost should not exceed Tk 200 crore. If we estimate liberally, the total cost for the units should not be more than Tk 450 crore." said a PDB official.

PDB argues that if competitive bidding is avoided, the two plants could be built by 2005. when country's demand for power will rise to 4600 MW as per the Power System Master Plan.

But PDB is trying to justify (he budget saying that Kaptai-4 and Kaptai-5 unit, set up in 1998. cost Tk 280 crore and that the taka has been devalued against the dollar since then.

But a PDB expert said. 'Since the mid-nineties, prices of power plant components nosed-dived by more than fifty per cent because of technological advancement. That is why. all new projects of PDB and the private sector have become much cheaper".

The new plants will be installed by the same Japanese company and the consultant which built Kaptai-4 and Kaptai-5 units.

The project will be funded by the Japan Bank of International Cooperation (JB1C) and Bangladesh government. The government will provide the infrastructure cost, which PDB calculates at Tk 237 crore. The re^t will be provided by JBIC for pun base of machinery.

\ proposal given by Canadian firm SMC Lavalin for the two units last year was put aside, they said.

When contacted, the PDB Chairman admitted that the project was being pursued on the basis of "unsolicited negotiation" and that the cost was higher than land-based ones. "Hydro-plants need additional investment for infrastructure. Though the initial cost is high, hydro power plants are cheaper as these are more durable than conventional land-based plants." he said.

The additional expenditure will be reflected in the overall power generation cost of PDB and ultimately passed on to the consumers.