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Power sector slumps on political prank

Shakier Khan
Load shedding may hit as high as 1,000 megawatt next year, the Power Development Board (PDB). fears, blaming lobbying by vested interest groups and politically motivated decisions for stagnation of the power sector.
The Prime Minister's Office (PMO) ordered in the last couple of weeks re-tendering of the 450-megawatt Sirajganj power project and the 90-megawatt Fenchugtinj powerproject.
The tenders of both projects were almost at the final stage, but the Sirajganj project is being retendered apparently due to an anti-Awami League attitude. The Fenchuganj project goes for a record fifth re-tenderingas a vested interest group failed to secure the bid, sources said.
Another project, die 450 megawatt SavarpawerprojectoftheRural Power Company Ltd., is also being shelved as its main donor has decided to withdraw the fund because of allegations of corruption.
The Sirajganj project tender was cancelled although after three rounds of tendering the PDB secured a bid from Summit Group with a power tariff so low diat it
beats the price of the 450- megawatt AES Meghnaghat Project. Summit also received $116 million credit from organisations like World Bank and die Asian Development Bank (ADB).
Sources said there is no plausible reason for the Sirajganj project to go for re-tendering, especially when the PDB was failing to attract bid-dersto this scheme.
"The decision for re-tendering was purely political. Summit Group chief Aziz Khan is the brother of Awami League lawmaker Faruk Khan,” said a PDB official, asking for anonymity.
Adz last week, however, denied being a victim of politics. "Faruk Khan is an individual and he is free to choose whatever party he wants to get involved with. He is not involved with the affairs of Summit Group and I believe die government isnot treatingtheSummitbidin that light," hesaid.
But industry insiders say the PMO's decision was based on anti-Awami Leaguesentiment.
ThePMOhasapparcntiydccidcd to re-tender the Fenchuganj project which the PDB and the Power Division of energy ministry wanted to award to Japanese company Sumitomo. Sumitomo was selected FROM PAGE 1
as the lowest bidder in March as it quoted $83 million to set up the plant. However soon after its selection, it hiked thepricetoS85 million. Besides, a number of irregularities were found initsproposa).
The second lowest bidder, Canada's Lavalin. however, objected to the manner in which the tender was being handled and said Sumitomo grossly breached the bid terms. The Canadian government officially protested against procedural violation in the bid with the Bangladesh High Commission in Canada for 'unfair1 handling of the project. "Wfe wish to ensure that our companies can compete on equal terms with those fromothercoun tries."
In the face of protest from a country like Canada, the PMO last month formed a committee with experts from Bangladesh University of Engineering and Technology (Buet), which found seven flaws in Sumilomo'stender.
According to rules, when the top bid is found flawed, the second lowest bidder is invited for negotiations. "But lobbyists of a certain 'bhabari do not want the project to go to any other company,"said an industry insider.
A top PDB official admits the power sector growth is being hindered due to decisions taken on the basis of political considerations and lobbying by vested interest groups. He adds the repeated retendering testifies to such mishandling
"But the reality Ls we are now set for a huge load shedding next year. Power generation is already suffering from poor gas supply. And gas supply is suffering because of a lack of investment there. And now with two or three major power projects going for retender, we believe the level of load shedding will hit a maximum 1,000
megawatts next year," he says.
Pctrobangla officials, on the other hand, say thegovernment is going to' spendTkl.OOOcrorethisfiscalyearon ‘ infrastructure development to improve.gas supply next year. They added tenders for these infrastructure projects are beingdesigned in a way so as to make sure that incompetent companies backed by powerful political lobbiesgct the job.
Slate Minister for Power Division Iqbal Hasan Mahmud however says both projects have some 'transparency’problems.
The accusation of political interference in the Sirajganj project is not true. Both the Sirajganj and Fenchuganj projects are being re-tendered on the question of transparency," MahmudpointsouL
. But he adds power sector investment around the world is at a low ebb. "Mfe held four rounds of tender for Sirajganj and got only one bid. Our main focus was to fix the tariff." he says.
On die question of lobbying of a certain 'bhabari the state minister adds. There is no involvement of any bhaban in the power sector."
He acknowledged the impending load shedding due to lack of new power projects next year but points out. The level will not be that high (1000 megawatt shortfall) ifthelbngi, Siddhirganj and Barapukuria coal mine projects start operating on schedule."
These three schemes --Tongi ICO MW, Siddhirganj 200 MW and Barapukuria 250 MW projects - are more than three years old. The state minister says work for these projects is well on schedule and the biggest of them. Barapukuria project, is likely to come into operation in next March or April.