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Contractor accused of sabotaging power plant

RPCL checks legal aspects to cancel contract with Lahmeyer

Sharier Khan
The Rural Power Company Ltd (RPCL) is scrutinising legal provisions to cancel the operation and maintenance contract with Lahmeyer International Palli Power Services Ltd (LIPPS) for sabotaging the 140megawatt (MW) Mymensingh RPCL plant, a well-placed source said.
LIPPS is accused of wholesale corruption, tender manipulation and exercise of unauthorised power. The over-riding influence of LIPPS had kept the RPCL hostage for a long time.
On Thursday last, LIPPS officials engaged in a serious confrontation with the high officials of RPCL, its parent organisation, the Rural Electrification Board (REB), police and magistrates. LIPPS finally shut down the 140MW two-unit power plant and fled the area.
"According to the law, any shut down of a power plant requires clearance from the Power Development Board [PDB], otherwise it is considered an act of sabotage," a well-placed RPCL source said.
The REB-RPCL officials were visiting the plant site to investigate an allegation of corruption against Sky Engineers, a sub-contractor for the under-construction third phase 70MW power plant.
Sky Engineers is owned by the chief of LIPPS, while the third phase plant is being built by German company Seimens, which is also represented in Bangladesh by the chief of LIPPS. The contract was awarded without any negotiation and LIPPS facilitated the deal as consultant.
After one day's effort the REB-RPCL officials managed to re-start the power plant. However, during the effort they found that the LIPPS staff had sabotaged some vital equipment.
LIPPS annually drew $6 million for an operation and maintenance contract signed through an unsolicited negotiation years ago. PDB sources said the value of their contract should have been less than $1 million.
"Following the incident, the RPCL board held a meeting and unanimously agreed that LIPPS has seriously violated its agreement and sabotaged the plant and its contract should be scrapped," said the source.
"We shall take the final decision upon legal scrutiny in the next RPCL board meeting very soon," another top REB source quipped.
According to these sources, the REB-RPCL officials made a sudden visit to the Mymensingh plant site upon receiving complaints from High Speed, a third party contractor for Sky Engineers. High Speed had deployed 295 personnel in the construction for the third phase Mymensingh plant.
However, following an unknown dispute, the Sky Engineers suddenly barred the High Speed staffs from entering the project site. Since the RPCL has already spent 60 percent of the investment for the plant, it felt that this problem should be resolved the earliest.
"When this was informed to the secretary for power, he instructed the Mymensingh plant operator LIPPS to permit entry of the High Speed staffs," said the RPCL source.
But again they were not allowed an entry, saying that their gate passes have been cancelled. "It's an amazing situation. This is an RPCL property, but Sky Engineers is issuing and cancelling the passes," said an RPCL official.
Upon receiving information, the secretary for power reiterated that the REB and RPCL do not need anybody's permission to enter their property. He suggested the REB to investigate the state of security at the project site, which belongs to the government, not any private citizen.
This time, the RPCL-REB top officials along with the police and two magistrates went to the project site. But the plant's operation contractor, LIPPS, flatly denied their entry. LIPPS also gathered a good number of people armed with canes waiting at the gate.
In-charge of administration of the plant site, Firoze Kabir, told the visitors that he has been instructed by the LIPPS chief not to allow any entry. He also said if anyone enters forcibly, he will be attacked, said a source who was on the spot.
"Then we contacted the police high officials for police reinforcement, the secretary, the state minister for power and the Prime Minister's Office (PMO). Then with a stronger force we revisited the spot and upon seeing so many police, they opened the gate. But we realised they have shut down the plant and most of the people had fled the site. Within a few minutes, the remaining LIPPS and Sky Engineers officials were also gone," he added.
Last year, the RPCL lost a German grant of 45 million euros due to the corrupt role of LIPPS, which was exposed by The Daily Star. However, due to the close link of the LIPPS chief with the "alternative powerhouse" of the government, nothing has happened so far.
Allegations of corruption against LIPPS were raised by the Asian Development Bank (ADB) and German donor KfW in the past. The LIPPS chief asserted strong influence over the RPCL to resist an auditing by the German government. The German government's initial investigation found that the chief of LIPPS illegally remains present at the RPCL board meetings and there are many irregularities in the RPCL.
The RPCL, registered in 1994, was formed with REB, sharing 51 percent and five Palli Bidyut Samity (PBS) sharing 49 percent.
During the Awami League rule, the LIPPS chief waged political backing from Sheikh Helal, a relative of the-then prime minister. Now the LIPPS chief wages similar political backing.