Haripur 360 MW Power Project
Govt set to allow unproven tech
The Electricity Generation Company of Bangladesh (EGCB) is set to accept a gas turbine, which has not been commercially used anywhere before, for the Haripur 360 megawatt gas-fired combined cycle power project from the project’s contractor although its tender rules forbid use of such unproven technology.
As per a global standard practice, the EGCB forbids use of generator technology that has not been satisfactorily used for at least two years to ensure safety standard of a power plant.
In February, the EGCB signed a contract with Japanese company Marubeni to set up a power plant in Narayanganj with Tk 1,665-crore funds from the Japan International Cooperation Agency (Jica). In March, the prime minister laid the foundation stone of the project.
To be completed by August 2013, the plant will generate 412 MW power.
When the tender for it was floated late in 2009, the original EGCB bid documents left a scope for a bidder to sell unproven power generator.
As this triggered complaints, the Jica that gives concurrence to every step of this bid, sought the EGCB’s clarification. In December 2009, the EGCB modified the bid documents saying that any power generators offered by a bidder must have at least two years’ performance record.
The bidders also complained that a competitor was trying to pass an unproven generator by showing it as one that had evolved from a proven model. The EGCB clarified that there was no scope for a bidder to pass an unproven generator as a proven one by showing that it had “evolved” from an earlier model of the series.
In early 2010, the EGCB prequalified Japanese Sumiomo and Marubeni, Chinese Guang Dong, Spanish Cobra and Italian Ensaldo for the tender based on their technical and financial strength.
In the tender, the EGCB sought a power generator having a capacity range of 15 percent instead of the usual 10 percent; which meant that a bidder can offer a generator that produced power 15 percent more than the required 360 MW.
Only two bidders –Sumitomo and Marubeni — match this requirement with two different generators manufactured by Siemens and Mitsubishi Heavy Industries (MHI). The Siemens generator had a proven record, while there was only one MHI generator with such capacity but it was newly developed having no proven record as of 2010.
On the basis of this, the tender committee disqualified three bidders and qualified only Sumitomo and Marubeni.
In November 2010, the EGCB disqualified Sumitomo’s tender and opened only Marubeni’s bid. A top EGCB official told The Daily Star that Sumitomo’s bid had severe technical flaws and only Marubeni’s bid qualified.
Back then, Sumitomo representatives requesting anonymity had alleged this was done so that nobody can judge if Sumitomo’s bid was cheaper or costlier than that of the other bidder.
They claimed that their bid was flawless and their Siemens generator was more efficient than the Marubeni MHI generator. They also alleged that Marubeni was selling the government an unproven MHI generator of “701F4” model.
They argued that in order to sell the newly developed model internationally, Mitsubishi needed to have a foreign installation through Marubeni to create a record of experience. The Haripur project is its proving ground.
The Daily Star obtained some parts of the Marubeni bid documents. In most part of its technical document, Marubeni offered a 701F generator, which is the name of the series, without mentioning the particular model for the project. However, in some papers describing the power plant’s loading data, it clearly mentioned the 701F4 model.
Mitsubishi has three proven generators from its 701F series (701F1, F2 and F3) which generate around 400 MW of power in laboratory conditions but much less in real situation. Its newly developed F4 generator can produce 465 MW power in laboratory and over 400 MW in real situation. The contract says Marubeni will produce a net 412 MW power.
Following this selection, Sumitomo had earlier this year asked the authorities to clarify in writing why its bid was rejected. The EGCB verbally clarified its position but refused to give a written clarification.
On June 13, Sumitomo wrote to the EGCB citing certain clauses of the tender terms, and the Public Procurement Regulation (PPR) which makes it mandatory for the authorities to explain in writing to a rejected bidder why its offers were rejected.
Authorities defend selection
An EGCB top official claimed they were not accepting any unproven generator. He said Marubeni’s technical offer mentioned providing the “proven” 701F model, and not particularly 701F4.
“We will review when we receive the real model,” he told The Daily Star last week requesting anonymity. He also said that as per the agreement, the bidder could not supply an unproven generator.
But 701F is the name of the series, and not of the model. This series offers four models — the latest one is unproven.
When asked, Jica senior repsesentative Mayumi said the Japanese financier will not accept this if it finds that the gas turbine has been bought breaching terms and conditions of the agreement.
“At the moment, we know that they have not breached terms and conditions of our guidelines,” she said. “They have already submitted their written note of acknowledgement of compliance. In effect, they have promised that they will carry out the services in compliance with the guidelines.”
Jica formally told The Daily Star on June 9 that as per its agreement with the government, the EGCB is the authority responsible for approving the procurement while Jica reviews the process at every stage. Following its own guidelines, Jica gave its no-objection to EGCB’s selection.
A Marubeni representative in Dhaka, requesting anonymity, claimed to The Daily Star that there was no such scope to bypass the contract to provide an unproven generator. When pointed out that the contract documents talk of an unproven generator, he said “We do not know what documents you have got. But there is no scope for us to bypass the contract.
-With The Daily Star input
