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Major power plant shut for over 20 months

Slow bidding process, change of decisions behind delay

Sharier Khan
Even 20 months after a major gas-fired power plant in Ghorashal went out of order due to negligence of its technicians, the Power Development Board (PDB) could not select a contractor to repair it due to a slow bidding process and change of decisions.
The damage of the 210 megawatt plant in July 2010 worsened the coun-
try's load shedding situation. As it remains out of order, the government is spending extra money to buy similar amount of power from rental power plants, said a well-placed PDB official.
While the lowest purchase price of power from rental plants is Tk 4.8 per kilowatt hour, the same amount of power from Ghorashal plant, built by Russian company Technopromexport,
costs less than Tk 3. This means the government is counting heavy replacement cost
The government had taken urgent measure to reduce the load shedding by taking up rental power projects as a short term solution. These plants having three to five years' contract are now generating more than 1,500 MW power. As most of these use imported oil, the government is shouldering a huge amount of fuel import cost, which iscausinghigh inflation.
But the government did not pay attention to quick repair of the existing troubled or old power plants. Ghorashal unit-six power plant is one such case.
Back in July 2010, due to negligence of plant officials, a high voltage breaker of Ghorashal plant failed. As a result, its turbine and generator — lifeline of the plant — were completely damaged. Later, an investigation committee identified the causes of the disaster, and the people responsible for it The authorities are now taking actions against these persons.
Although it would have been easier if the PDB went for asking the plant's builder Technopromexport to directly submit an offer for the repair, the government floated a restricted tender in December. Industry insiders said the restricted tender was floated under pressure from various lobbies who wanted the job.
In this tender, two Russian companies Technopromexport and Inter Raoues— sought around $27 million and $30 million respectively for the repair, while Indian company Swati Energy offered to do the job for more than $70 million.
The tender evaluation committee found all of these offers too costly and observed that there were
other discrepancies in their offers. The major deviation was that all the bidders sought around one year time to complete the job, when the PDB thinks it can be done in three months.
The PDB in April last year decided to cancel the tender and go for a direct purchase method to save time. It was decided that the PDB would ask the lowest bidder Technopromexport to submit a direct purchase offer. In case the company failed to make such an offer, the second lowest bidder Inter Raouse would be asked to submit its offer. The PDB also sought exemption from the Public Procurement Rules under the Power and Energy Quick Supply Act, 2010.
The PDB proposal was then sent to the prime minister through the power ministry for her consent. She approved it on June 8 last year.
But the approval was never materialised. Instead, a six-member technical committee formed to oversee how the repair should be done, recommended going for another round of restrictive tender.
Accordingly the PDB held discussions with three Russian companies --Technopromexport, Inter Raoues and Power Machines in July last. Amonth later, the power ministry asked the PDB to include yet another Russian company -- IED Holding—in the discussion. The PDB did so.
On the basis of this discussion, the PDB sought the
ministry's approval for eight terms and conditions to be incorporated in the tender documents. These included unlimited provision liquidate damage, and a three years warranty.
Upon the ministry's clearance, the PDB in midDecember floated the restricted tender asking the bidders to submit offers within the first week of February. However, when a couple of bidders sought extension of the deadline, the PDB at first extended it to February 26 and then to March 12.
PDB Chairman Alamgir Kabir says that he expects to complete tender evaluation within a month after the deadline. Once the contract is awarded, the repair will be completed in four months.
Industry insiders, however, say the job will require at least a year to complete. If the PDB remains inflexible about the time limit, its tender will fail to find a contractor yet again.
Since Ghorashal unit six went out of operation, the PDB was left with the natural gas being supplied to that plant for power generation. It took a separate initiative late last year and amended an existing contract with British rental power company Aggreko to convert its diesel-fired 145 MW plant into a gas-fired one. This is saving the PDB a huge cost for diesel import while utilising the available gas. The deal with Aggreko will expire late next year.