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Ghorashal Power Plant

PDB fails to repair it in two years

Wrong selection of bidder leads to failure

SHARIER KHAN
The Power Development Board (PDB) is failing to repair a major gas-fired power plant in Ghorashal that went out of order in July 2010, as it picked a trading company for the work instead of the plant's original manufacturer through a restricted
tender two months ago.
This means the chance of an early repair of the 210 MW plant that produced cheap power has become slim. The shutdown of the plant had worsened the country's load shedding situation, and replacement power is now being generated by rental plants which charge a much
higher rate to produce power.
In July, the government awarded the repair job to trading company IED Holding of Russia that quoted a price of Tk 187 crore. The price was much lower than the plant's manufacturer --Technopromexport--which also participated in the bid. But soon after winning the bid, IED Holding refrained from submitting performance guarantee (which is 10 percent of its offered price) and an authorisation letter from the original equipment manufacturer.
After giving IED Holding several notices and reminders, the PDB on August 30 served it with a notice of encashment of bank guarantee of $3,00,000 which it had submitted during the tender process.
The power ministry is now planning to go for a retender, sources said.
"The selection of IED Holding was wrong. But the ministry pushed the company in the tender process because of influence of some political lobbyists, who wanted the job,” said an official. "It reminds us of the way certain Chinese company won bids during 2001-2006, by quoting unusually low prices and then failing to deliver the job," he said.
Back in July 2010, due to negligence of plant officials a high voltage breaker of this Ghorashal plant failed. As a result, its turbine and generator — the lifeline of the plant — were completely damaged. Later, an investigation committee identified the causes of the disaster and the people responsible for it, and suggested taking actions against them.
In December that year, the PDB floated a restricted tender in which two Russian companies and an Indian company participated. The two Russian companies — Technopromexport and Inter Roues — sought around $27 million to $30 million and the Indian company — Swati- sought $70 million for the job.
As the prices seemed too cosdy and the offers flawed, the authorities in April last year cancelled the tender. The PDB sought the prime minister's approval for direct purchase from the cancelled tender's lowest bidder Technoprompexport. This will save time, the PDB argued.
On June 8, 2011, Prime Minister Sheikh Hasina signed a decision to award the repair work through a direct purchase method.
But the decision was never implemented. Instead, under the directive of the power ministry, the PDB went for a second restricted tender by including IED Holding. But it took nearly another year to award the job to IED Holding, only to face a failure.
Since the Ghorashal unit -6 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 amendment to 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.