The cabinet purchase committee yesterday approved setting up four private power projects including a large coal-fired one with their production capacity totalling up to 725 megawatt, enough to light up one third of the capital city.
Except the coal-fired project, the other three are failed rental power projects deals for which were originally awarded to three local companies on the basis of unsolicited nego-
tiations.
As these rental companies failed to implement the projects in time, and on the basis of their appeals, the government turned those into private power projects for a 15-year term each. The rental projects had a five-year term.
Contract for the coal-fired project with 300-650 MW production capacity has been awarded to local company Orion Group having a Chinese joint venture partner—Longking. The plant will be set up at Mawa in
Munshiganj on land owned by the joint venture company.
This is going to be the single largest power project in the country requiring an investment of $ 600 million.
This will also make Orion a leading local company following Summit Power. Orion was recently awarded contracts for two other 300 MW coal-fired power projects in Khulna and Chittagong. With these two, the companywill have to invest $1.2 billion.Orion had offered a 25-year levelised tariff of US 5.84 cents per kilowatt hour for 522 MW power. Its nearest competitor S. Alam Steel Ltd and Lanco Infratech sought a tariff of 8.55 cents.
The 1998AES Meghnaghat gas-based power project offered a tariff of 2.78 cents that no other companies could match in recent years.
The joint venture company will build, own and operate the plant. The power ministry in its proposal to the cabinet purchase committee said in the 25 years of its operation, the plant is expected to sell electricity worth Tk 12,450 crore.
It will use imported coal to produce power.
The plant will start commer-cial power generation 45 months after the signing of contract with thegovernment
Orion Group was picked up from two qualified bidders in June. Earlier in an open
tender for the project floated by Power Development Board, five power companies qualified to participate in the bid.
An Orion source says they will use brand new equipment from the best international manufacturers. The boiler, turbine and generators— which are the major equipment—will come from the best European sources. The company will assign a Chinese contractor for installation the plant.
"Financing of the project will be made through Export Credit Agencies (ECA) of Europe and China. A couple of financial institutions of the Middle East are also interested to provide funds for ffiis project," says the Orion source.
Orion has already procured 31 hectares of land at Mawa and another 31 hectares in Khulna for its coal-fired power projects. It is now purchasing land in
Chittagong for another project, he added.
Though a newcomer in power sector, subsidiaries of Orion Group has built two fuel oil-based power projects having 100 MW production capacity each. Both the projects were implemented timely and are supplying electricity to the national grid regularly.
The purchase committee also approved a 108 MW furnace oil- based private power project in Keraniganj to be implemented by CLC Power and Associates. The plant will be set up on its own land.
CLC Power will sell electricity for 15 years at a rate of US 9.88 cents per kilowatt hour. The plant will start commercial operation within ayear of signing the contract.
The contract was awarded to the company on the basis of unsolicited negotiation. It originally was awarded a rental power project for a five-
year term.
The company had purchased new plant equipment for the project but it could not supply power as per schedule, and sought government permission to set up the plant as a private project.
Another approved project is a 52.5 MW furnace oil-based one in Munshiganj to be implemented by a joint venture of Peoples Energy and Venture Energy. The joint venture has been awarded contract for the project on the basis of unsolicited negotiation.
The cabinet purchase body awarded deal for another 52.5 MW project to a joint venture of Union Consultants and Venture Energy Resources. The plant will be set up in Comillafora 15- yearterm.
Both these plants will sell power at 9.94 cents per kilowatt hour and start commercial operation within one year of signing the contract.