The cabinet committee on purchase yesterday approved the construction of the government's "last" gas-fired 400-megawatt power project, South Bibiyana, by a Spanish-Korean joint venture.

The committee also approved the overhaul of two-decade-old Ghorashal 210-MW fifth power unit at a cost double the actual requirement.

The South Bibiyana would be built in place of the cancelled Bibiyana-1 power project with local company Summit.

This is the first time the Power Development Board (PDB) is financing for the South Bibiyana from its 'Maintenance and Development Fund'.

This fund was opened in mid-2011 as per a directive of the Bangladesh Energy Regulatory Commission and is powered by monthly deposit from a part of PDB's power sales.

The fund currently has around Tk 1,800 crore.

Spanish-Korean joint venture Isolux Ingenieria and Samsung C&T bagged the 400-MW project by beating two other bidders and making an offer of $288.28 million."This would be the last gas-based power project considering perennial gas supply shortfall.

"Unless a remarkable new gas reserve is found, the government would not go for any such power scheme," said a well-placed PDB source.

The tender for the project was floated in February asking bidders to drop both technical and financial proposals in the same envelope, instead of submitting the proposals separately.

This was done to save time.

"We would need to pay to the South Bibiyana contractor after one year of signing of the contract. Therefore, there would not be any problem financing it," the source added.

GHORASHAL UNIT-5

CONTROVERSY

The PDB recommended awarding the overhauling job of Ghorashal power unit-5 for $29.9 million to Russian joint venture Inter Rao Engineering and LLC Kharkovenergoremont.

This stands as a striking contrast to another bid of PDB where it is seeking approval to overhaul 210 megawatt Raujan unit-2 power plant for just $ 12.6 million.

The PDB floated its tender for the overhaul job earlier this year and received offers from three companies.

However, it disqualified bids of two saying they did not provide authentic end-user certificate and mention the web address of end-user in the non-authentic certificate.

But interestingly, PDB qualified InterRao-Kharkovenergoremont although its bid document did not include any authenticated end-user certificate.

To justify the qualification, the evaluation report notes: “But web address of end-user is mentioned in the certificate."

The report also said the bid did not mention "stake" of the joint venture partnership and it can be “assumed" that the joint venture partner Kharkovenergoremont would have 25 percent stake.

But findings of the evaluation can never be based on assumptions, said an official.