It makes winning bid also for Bibiyana-2 power project; plans for $1b investment
A local power company along with its American partner General Electric yesterday had its third winning bid in a major power project — Bibiyana phase-II — to become the first one in the country going for a total investment of one billion dollars in this sector.
Summit sought a power tariff of US 3.3991 cents per kilowatt hour for a contract period of 22 years. Its nearest competitor Indian GMR made an offer of 4.932 cents per kilowatt hour.
The Power Development Board yesterday opened the financial offers of these two bidders for the 450 megawatt gas-fired combined cycle private power project.
The PDB will now check back if Summit’s price offer has any miscalculation. It will then send its recommendations to the power ministry to award the contract to Summit, if the calculations stand correct.
In less than one month, Summit made three winning bids for Bibiyana-1, Meghnaghat-2 and Bibiyana-2 private power projects.
Summit was declared the lowest responsive bidder last month for the Bibiyana-1 project with its offer of 3.32 cents per kilowatt hour. It is the lowest offer in any power tender floated in the last six years.
The company also made a winning offer for the Meghnaghat-2 dual-fuel project where it will have to build a plant that can run both on gas and furnace oil. It offered 3.98 cents per kilowatt hour for gas-based power and 9.11 cents per unit for furnace oil-based power. Its average tariff stood at 6.86 cents.
While Summit’s bids are perceived as ‘stunningly’ low, the local company now has to invest up to $1 billion in building the three power projects, and also forming three implementation teams. It is a massive task, and no Bangladeshi has even dreamt of being able to accomplish such a job, one source said.
“We have already appointed Germany’s Lahmayer International as our engineering and supervision agency,” says Summit chief Muhammad Aziz Khan. “We have also signed a memorandum of understanding with General Electric (GE) assigning it with maintenance of the power plants and engineering supervision of the project during the implementation period.”
Asked about the one billion dollar investment, Aziz Khan said, “In the modern world, good projects do not lack investment. Multilateral agencies and the USA are keen to see development in this crucial sector. We have been reassured by the multilateral agencies, GE Energy LLC and our capital market that there won’t be any shortage of funding in the most needed infrastructure.”
The PDB wants to conclude signing of the agreement by December with the target of bringing the power plant into operation in 2013. It floated the tender for the project in May.
The Bibiyana-2 power project will use gas from Bibiyana gas field.
The gas field that produces around 700 million cubic feet gas per day (mmcfd) now is expected to produce 1,000 mmcfd by 2013.
