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FENCHUGANJ POWER PROJECT

PMO questions unfit bidder's getting nod

STAR REPORT
The Prime Minister's Office has sent back the files on the 90 megawatt Fenchuganj power project, okayed by the cabinet purchase committee, asking the power ministry to explain how Chinese company Harbin qualified to get the project, sources said.
Harbin Power Engineering Ltd was earlier disqualified as a bidder for this project that was re-tendered five times. A special committee formed during the third re-tender found Harbin had inadequate experience.
But during the fifth re-tender late last year, Harbin mysteriously got 'qualified' in the Power Development Board (PDB) evalua-tion. In April, the cabinet purchase committee approved the bid and in less than a week, the cabinet committee on economic affairs bent rules to allow down payment of 10 percent of the project cost to Harbin before its implementation began.
In 2002, Harbin was awarded contract for the Tongi 100mw simple cycle power plant of the PDB. The plant was launched in March one year beyond schedule and it is yet to go into full operation due to technical glitches.
The Fenchuganj project was repeatedly re-tendered due to attempts of different lobbies to bag the project through bid manipulation. Against this backdrop, the government two years ago formed a special committee to look into the bid evaluation during the third retender. The committee disqualified Harbin after reviewing the documents.
When the PDB floated the sixth tender for the project in October last year, two companies participated in it -- Japanese Sumitomo Corporation and Chinese Harbin Power Engineering Ltd.
In the re-tender, the PDB qualified Harbin on the basis of the documents it submitted. This prompted the other bidder -Japanese Sumitomo -- to accuse the PDB of siding with Harbin. Sumitomo ultimately withdrew from the bid as PDB refused to play fair.
Harbin has a partner in the Fenchuganj bid --Doosan Heavy Industries of Korea.
The bid criterion wanted the bidder to have 10 years' experience in power sector in addition to experience of designing, inspecting, building, supplying, testing and commissioning at least one 90 mw power plant outside its country of origin.
Bid documents show Harbin has worked as a consortium partner with General Electric (GE) company of USA in Uch power plant in Pakistan. The plant was supplied and mainly designed by the GE. So, Harbin's experience in this regard does not meet the requirement.
Harbin also cited the experience of its Korean partner. But the bid terms demand experience of the lead sponsor, and Harbin is the lead sponsor.
Harbin has won the bid by making an offer at Tk 524 crore.
The last cancelled bid drew an offer of 85 million dollars (around Tk 500 crore) from Japanese company Sumitomo.