The power ministry is now pressing for an unsolicited deal to generate 70 megawatt electricity, this time with a 'trading company' located in Baitul Aman residential area in the capital.
Though an unsolicited deal goes against the existing policy, the ministry has gone for it following Prime Minister Sheikh Hasina's call for any quickest possible solution to ease persisting loadshedding situation that has almost crippled public life and businesses at the start of summer.
The ministry, which on March 18 forwarded the trading company's proposal to the Power Development Board (PDB) for its opinion, is promoting the deal mainly for the "low" tariff proposal, forgetting once more the experience aspect of a bidder.
The latest move came on the heels of the government's frustrating experience with rookie rental power companies that failed to deliver as yet after winning contracts with "low" tariff proposal.
Sources say the authorities like in the past are once again downplaying the background and capability of the trading company in delivering a power plant.
Previously unheard-of company, the Al-Nahian Trade International proposed the power ministry on February 28 that it could install a diesel-fired rental power plant of 60 to 70 MW capacity in Rajshahi for 10 years at the rate of Tk 12.53 per kilowatt hour.
This rate is five paisa lower than that offered by local furniture giant Otobi against a 100 MW diesel-fired rental power project in Khulna. The Otobi deal, considered cheapest in the diesel-fired rental power category, was signed along with two other deals by PDB in February.
Managing Partner and Chief Operating Officer Tofazzal Hossain of Al Nahian Trade International told The Daily Star over the phone his company does not have the experience of installing any power plant.
"But we have our US-based partner that has such experience," he said.
A ministry source justifies the latest action saying the prime minister, frustrated by the load-shedding scenario, has directed the ministry to take up any measure to add some power within the shortest possible time.
The premier has assured that she would approve an unsolicited deal, if need be, the source points out.
" Following the instructions, the ministry has sought offers from different power companies and asked them to match the price with that of Otobi. Al-Nahian Trade International is the only company that is offering a price lower than Otobi’s,” adds the source.
The Power board scrutinised the proposal of the company and opined that the existing policy does not allow entertaining any unsolicited deal. Only an appropriate authority can decide on such a proposal, it added.
This rental plant might be able to provide some relief in the summer in the context of perennial power crisis of the country, the PDB noted, adding, the present load-shedding hovers around 1,000 MW to 1,200 MW. The PDB added if the government approves this unsolicited deal, an agreement for two years might be signed with the company.
However, the government is trying out rental power deals since 2005 as a quick solution to the ever-increasing power crisis.
At first, the then BNP-led alliance government tried and failed to award over 40 rental power contracts to ruling party men and none to any genuine power companies. Some deals were signed at the fag-end of the alliance government tenure, but these failed to create any positive impact.
The caretaker government revived the venture and awarded several deals except one to inexperienced rental power companies. Half of them failed to launch their plants.
The PDB's late last year's
tender for eight rental power projects totalling 530 MW power capacity drew several dozen bids, mostly from inexperienced companies offering low prices that experienced companies could not match. But when it came to signing power deals, PDB could sign only three deals totalling 250 MWcapacity.
Previous attempts of PDB to secure rental power deals have invariably resulted in the contractors' failure to meet project deadlines. Although such failure means paying PDB hefty penalties, the defaulter companies resorted to the court and obtained injunction against such payments.
Till date, PDB could not secure power from the Sikaibaha 55 MW rental power project, Ashuganj 50 MW project, Fenchuganj 50 MW project and Bogra 20 MW power project. All of them are now eight to 18 months behind schedule although their contracts are only for three years.
Rental power projects are different from conventional power projects because these are supposed to be installed and uninstalled within a very short notice. A rental power contractor is supposed to own power plant equipment in its inventory to ensure such speedy implementation.
But all rental power contracts in the country, except for one 40 MW deal with a British company, were awarded to entrepreneurs who procured plant equipment after they bagged contracts. As a result, all the contractors failed to meet the deadline and consequently, the government failed to minimise the country's load-shedding as planned.