Govt faces tough time with power projects

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With the cancellation of two contracts to set up power plants totalling 600 megawatt (MW) capacity, the government is now left with the enormous pressure of floating tenders for more than 14 major power projects having more than 4,000MW capacity in total.

The situation created new worries for the government. Finding the enormous finances for implementing these projects has become a tough challenge while Petrobangla is unable to ensure gas supplies for all the projects.

“As floating a large number of tenders for power projects is not encouraged by international financiers, we are initially floating two tenders, one this month and one in December,” said a top power ministry source.

The request for proposal (RFP) for the Bibiyana 450MW power plant will be sought from bidders next week and the RFP for Sirajganj 450MW plant will be sought in December. As per schedule, the government is also set to float the tender for Meghnaghat-3 power project in January.

Considering the gas supply shortfall, which is affecting the government’s plans to go for more power plants, the power ministry is thinking about dependence on alternative energy source. The new power projects would require at least 650 million cubic feet per day gas supplies within the next three years.

“The ministry is now conducting a pre-feasibility study for installation of coal-fired power plants at Chittagong and Mongla ports. The idea is to initially use imported coal to generate power,” he added. If this is feasible, it will have long-term impact on the market. This would encourage local coal production–which now remains confined to the low coal production at the Barapukuria coalmine.

The ministry is also considering installation of two new 50MW hydropower units in Kaptai. “Such units may be costly to install but we will have no fuel cost to run them. If we can get power from these units during the summer, it will serve our purpose,” the source pointed out.

Meanwhile, the Power Cell of the power ministry floated a tender for rental power units for three years in eight locations and received “good” offers in seven of them, totalling 250MW capacity.

Sources said that the selection of bidders would be finalised within this month with the view that the contractors will be able to launch their power plants by next April.

They said three international companies made low-price offers in three places, totalling 80MW power capacity, and have generators in stock which could be installed by next April.

Interestingly, the remaining four low-price offers, totalling 170MW capacity, were made by Bangladeshi companies which do not have any generators at their disposal.

“These companies are now shopping for generators in different central Asian countries and Russia. Let’s hope that such attempts can actually deliver a power plant,” said an official.

Last month the government cancelled two power projects controversially awarded by the previous government. These are: Meghnaghat phase two 450MW and the 150MW Chandpur power projects. The cancellations were prompted by the contractor’s failure to fulfil obligations.

A power ministry high official said the Meghnaghat-2 project is currently undergoing a litigation process with the failed contractor BON Consortium. A fresh decision will be taken after this legal process is complete.

The government will soon float a tender for the 150MW Chandpur power project.

The other power tenders in the pipeline include a 360MW scheme in Haripur, two 150MW power projects in Khulna and Sirajganj, while the government is now dealing with the tenders for a 150MW power plant in Sylhet and a 210MW power plant in Khulna. A tender for the 150MW Sikalbaha power plant is now under review.

According to the Bangladesh Power Sector Development Plan and Strategies of 2004, the country in 2012 should aim at an installed power generation capacity of 9,840MW against a maximum power demand of 7,887MW.

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