Govt opens maiden power plant bids

Eight firms vie for 300MW station
Eight power companies yesterday submitted their financial and technical bids to install a 300 megawatt power plant in Siddhirganj under the World Bank financing, the first power bid opened under the new Awami League government.
Sources say four Chinese companies, an Indian and an Indo-German joint venture, a Korean and a Spanish company submitted their offers which the officials found quite “attractive”.
Of these, an influential ruling party leader having strong Chinese connection is allegedly representing all Chinese bidders.
Sources say he has taken over the “representation business” from a pro-BNP businessman as the AL came to power.
Though the price offers of the eight companies were available yesterday, the sources say that doesn’t necessarily reflect who was the actual lowest bidder due to a host of technical and financial issues that need to be evaluated properly.
The Electricity Generation Company of Bangladesh (EGCB) that floated the tender will take around two months to evaluate the bids with the help of Canadian consultation company SMC Lavalin.
After the EGCB signs a contract with the lowest responsive bidder, it will take another 24 months to complete the power project.
The sources revealed the read-out price offers submitted by the bidders yesterday. The bidders gave out their prices in Bangladeshi taka, euro, dollar and even in Chinese currency.
“The lowest price spelled out here may not be eventually the lowest one. That would be decided by the tender evaluation committee of the EGCB,” comments an official.
The tender rule insists that each bidder submit, along with power plant construction cost, a Long Term Service Agreement (LTSA) contract cost. While it is not so commonly used in this country, the LTSA is a system under which the contractor carries out maintenance and service for the plant.
Upon some basic calculation and conversion of offers made in various currencies, the official notes: “Chinese company Sinohydro made a price offer of $181.33 million. It is guaranteeing 288 megawatt power production using two units of Siemens equipment.
“The per kilowatt-hour power cost under this offer comes at $628.
“Sinohydro also made an LTSA offer of 39.71 million euro for two years of guarantee period and six follow-up years of service.”
Chinese company CMC sought $186 million, guaranteeing 287mw output using two pieces of Siemens equipment. With a kilowatt-hour cost of $649, CMC sought for a 38 million euro LTSA contract.
The Indian-German joint venture Gammons sought $186.59 million guaranteeing 283mw power generation using two pieces of Italian Ansaldo equipment. The per kilowatt-hour cost is $657 and the LTSA offer was just written as “16.50” without mentioning the currency.
“This could be a disqualifier,” says the source.
Chinese company Shandong sought $187.11 million guaranteeing 277mw power using two Siemens units. The per kilowatt-hour cost is $673 and the LTSA offer is 42 million euro.
Another Chinese company CMEC sought $203 million guaranteeing 287mw power using Siemens units. The kilowatt-hour cost is $673 and the LTSA offer is 42 million euro.
Spanish company Isolax sought $228 million guaranteeing 312mw power using two Alsthom units. The kilowatt-hour cost is $731 and the LTSA offer is 37 million euro.
Indian Bhel sought $214 million guaranteeing 280mw power using three of its own units. The kilowatt cost stands at $766 and Bhel apparently did not mention any LTSA price.
Sources say again this could be a disqualifier.
Earlier this month, the EGCB relaxed a tender clause that dictated the bidder should install 300mw (10 percent plus or minus) using two units. For Bhel that manufactures 100mw generators and not 150mw ones, the EGCB gave the opportunity to use three units.
Korean company Hyundai sought $277 million guaranteeing 312mw power using two Alsthom units. The kilowatt-hour cost stands at $889, while its LTSA offer is $29 million.
“The ultimate evaluation will be based on many explicit and implicit terms and conditions and design quality,” the source points out.
During the alliance government rule, only Chinese companies bagged a few power deals for their low price offers.
However, all of these power projects — Tongi 80mw to 250mw Barapukuria coal-fired scheme — performed very poorly due to flawed designs and poor equipment supply.
None of these projects had any internationally reputed consultant to safeguard the interest of the power authorities.
But this time, with an international consultant like SMC Lavalin and the World Bank’s monitoring, the tender is expected to produce authentic evaluation, the source adds.
Meanwhile, Petrobangla has confirmed gas supply for this power project. This has become a major issue as Petrobangla has declined confirming gas supply for many power projects, including the old 450mw Sirajganj power project.
The EGCB is already implementing a 220mw peaking power project at Siddhirganj with Indian company Bhel. This project is expected to commercially begin operation in a few months.

Courtesy of The Daily Star