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MEGHNAGHAT-2 POWER PLANT

Disqualified bidder on priority list

SHARIER KHAN
The disqualified bid of UAE-based Belhasa and Bangladeshi Orion Power for the 450 megawatt Meghnaghat 2 power project is high on the priority list for approval by the cabinet's purchase committee this week.
On June 26, the cabinet committee on economic affairs approved the bid which is backed by a strong ruling alliance lobby. The same group was awarded the massive Jatrabari-Gulistan flyover project with a lot of favourable terms last month.
Both the purchase committee and economic affairs committee are headed by Finance Minister M Saifur Rahman.
Sources said the Meghnaghat 2 project proposal was scheduled to be tabled at the purchase committee meeting today but the meeting may be rescheduled as the finance minister fell ill last week. They pointed out however the minister returned home from hospital on Friday, and there is also a chance that the meeting will be held as scheduled.
The purchase committee in March rejected approval of this project because Orion-Belhasa had changed the lead sponsor of their bid twice to qualify in the bid. They did it while the negotiations were going on. The Power Development Board (PDB) mysteriously did not
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disqualify the group although making such change is a gross violation of the rules and renders the tender process meaningless.
Belhasa and Orion showed experienced Japanese power company Nissho Iwai Corporation as lead sponsor to pre-qualify in the tender for this power plant back in September 2003.
But after the pre-qualification, Belhasa named BN Consortium as lead sponsor while submitting the bid. This time Belhasa replaced BN Consortium with German company Steag AG as lead sponsor.
Being a trading company, Belhasa lacks the qualification to be a lead sponsor in the bid for such a big power project while Orion came into being only in the context of this project.
Back in March, Saifur asked the power ministry how the cabinet committee could approve awarding a project to a party that did not win the bid or did not even exist when the PDB selected the bidders.
Yet, Saifur changed his mind at the June 26 economic affairs committee meeting where the power ministry and the PDB said they 'approved the change of the name of the lead sponsor'.
The Private Sector Infrastructure Guideline's clause 6.4.4 clearly states that the composition of bidders cannot change after prequalification. Other government bid documents also bar such changes.
The Orion-Belhasa-Steag consortium has been asked to provide only $10 million worth of performance bond, whereas in the case of Meghnaghat 1 or Sirajganj project, the bond was $30 million.
The ministry's proposal outlined a power tariff of 2.78 cents per kilowatt hour for the Meghnaghat-2 project.
The BNP- led four-party alliance government has so far awarded only two power projects and that also to a single technically disqualified company --Chinese Harbin--ignoring proper bids from some of the world's renowned power companies. Orion-Belhasa's Meghnaghat 2 deal will add to the list of disquali-
fied companies bagging deals in Bangladesh using political influence.