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SIRAJGANJ POWER PLANT

Another bidder pulls out

SHARIER KHAN
Bangladeshi power company Summit backtracked from participating in the second tender for the 450 megawatt Sirajganj Power Project following the retreat of Malaysian bidder Genting Barhard expressing its no-confidence in the country's bidding process.
With their non-participation, the Power Cell of the Power Ministry yesterday opened the tender with a lone bid of Bangladeshi PHP and its Indian partner Essar.
A top official of the Power Cell says, "PHP-Essar's bid will now be technically evaluated to see if it qualifies. If their offer is found responsive, we will open their financial offer."
Summit, which had won the first tender for Sirajganj project, officially did not blame anyone for its with-
drawal but stated its willingness to implement the project in accordance with its previous proposal.
In a statement yesterday, the company said, "Summit believes Summit's earlier proposal for development of Sirajganj plant in joint venture with Bangladesh Power Development Board (BPDB) in a public-private partnership mode provides the best solution for Bangladesh. Namely, local owners with lowest price payable in Bangladeshi taka."
It went on, "Summit remains ready to implement Sirajganj project as per first tender of BPDB at world's lowest price for such a plant in Sirajganj at US 2.789 cents a kilowatt hour.
"Summit reiterates its commitment to provide most efficient cost effective electricity generation for Bangladesh."
The Power Cell had pre-selected Summit along with its German partner Siemens, PHP-Essar and Genting Barhad through request for proposals (RFP) five months ago.
Genting withdrew citing the government's eagerness to strike an unsolicited deal for Meghnaghat-3 and another deal with a disqualified company for Meghnaghat-2 projects.
The company also mentioned that the current bid terms for the Sirajganj project has been modified in such a way that the lowest power tariff would be around 4 cents whereas the Meghnaghat-2 and 3 bid terms allow the lowest tariff at 2.78 cents. It argues that the Sirajganj bid is just a farce to justify the unsolicited and corrupt bidding process for Meghnaghat-2 and 3.
Genting told the Power Cell why it should spend thousands of dollars in preparing a proposal and have millions of dollars of bid bonds stuck when it cannot expect a transparent process?
Industry insiders say the confidence of genuine bidders eroded over the years due to the government's questionable handling of power projects. Almost all the bids fell flat because of external influences since the BNP came to power.
They also blamed a section of officials for asking for bribes at all levels of the tender process. Such a trend was absent for private power projects even five years ago, they say.
The tender processes show that instead of picking the lowest qualified bidders, the authorities repeatedly picked disqualified bidders offering higher prices because they were backed by strong lobbies, industry insiders pointed out.
Summit had won the first tender for the Sirajganj project in mid-2003 and finished financial arrangement with $70 million loan from the Asian Development Bank (ADB) and $116 million from the World Bank (WB) before the Prime Minister's Office (PMO) without any logical grounds cancelled it.
Sources said the reason for the cancellation is the chief executive of Summit is the brother of a parliamentarian from the main opposition Awami League.
Industry insiders stress that for the sake of the country's energy security, the government should rise above politics and personal likes or dislikes in selecting competent bidders.
"If a Bangladeshi company is found qualified, the government should be proud of it because this sector should ultimately be run by Bangladeshis," noted a top executive of a power company.
Other than the Sirajganj project, the government now has in its pipeline Meghnaghat-2 and Meghnaghat-3 projects, each with 450mw capacity. The Meghnaghat-2 bid is set to go to the UAE-based investment company Belhasa along with Bangladeshi Orion Power Company. They do not have any experience to match this bid. There has been no tender for Meghnaghat-3, which is secretly being awarded to US-Irish joint venture Cadogan Manning.