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Download PDF Various quarters are questioning the Power Cell’s handling of the rental power bids as it is seriously considering offers from two inexperienced and incompliant local consortiums that should have been filtered out at the final stage of selection.
Sources said two different consortiums, Energy Prima, owned by Hosaf group, and Green Power, of the Lotus Kamal group, appear to be the lowest bidders in five or six out of eight rental power tenders. As per the Power Cell’s criterion, these bidders do not qualify but their bids are seriously being considered because of “low price offers”.
Only two foreign power companies, which are specialised in rental power, turned out lowest bidders in two spots where they did not face competition from these local consortiums.
The tender committee filed its report to the power ministry on seven rental power bids last week. It is currently evaluating the eighth bid on Fenchuganj. A top source pointed out that the ministry has not yet taken any decision on the first seven bids.
Sources said if inappropriate bidders are selected, the government’s target to add 300 megawatt (MW) of power within the next summer on a three-year rental term might suffer. In the past, inappropriate selection of the Meghnaghat-2 project’s contractor failed to produce positive results.
The Power Cell, under the power ministry, floated the rental power bids in October, drawing 13 offers from five companies in seven locations. On November 19, the cell held another tender to draw offers for the eighth location and received two more such offers.
Sources said the cell’s tender evaluation committee includes an official against whom repeated complaints of favouritism were levelled from 2006. A number of bidders once again raised allegations against the same official and recently sent letters to the power ministry in this regard.
Once awarded a power contract, the contractor must start power generation within 120 days.
BIDS
The Green Power Ltd appears to be the lowest bidder in the Ashuganj 50MW and the Bhola 30MW bids. However, the Bhola bid also had a competing offer from a consortium comprising Indonesian Kalmax Energy and local GBB. “Till the evaluation is announced, it is hard to say who is the lowest in Bhola,” said a source.
Energy Prima appears to be the lowest bidder in Shajibazar 50MW, Kumargaon 50MW, Bogra 20MW and Fenchuganj 50MW tenders.
Aggreko International Projects Ltd, Singapore appears to be the lowest bidder in Khulna 40MW and Alstom Power Rental, USA in Bheramara 20MW.
The tariff offers made by Green Power and Energy Prima range between $15.9 per kilowatt a month and $19.75 while the offers of Alstom and Aggreko range between $21.7 and $27. “The wide difference is too suspicious to ignore,” a source said.
GROSS ANOMALIES
The Power Cell’s bid qualification criterion specifically stated that the bidder shall have experience of rental plants of 20MW or higher capacity during the last three years. The bidder will state the plant’s location, capacity, owner, power purchaser and commissioning date.
The criterion further dictates that the bidder must have barge-, skid-, trailer-mounted power plants in ready stock, either through ownership or “other arrangement”.
“Firstly, the consortium called Energy Prima is not even a legal entity,” said a source, adding, “It is not even registered under the Companies Act of Bangladesh. How can the tender committee even consider looking at its bid?”
Energy Prima consortium consists of Energy Prima and Hosaf Meter, which are both owned by Moazzem Hossain, and Russia’s Geo-Spectrum Group. Energy Prima’s business has been shown as “local agent” without explaining whom it represents and how it is related to the power sector. Geo-Spectrum, on the other hand is a Russian power plant manufacturer and not a rental power developer. Hosaf Meter Industry’s profile also says it is a “local agent/distributor” of a foreign manufacturer without clarifying what it actually means.
“Still, Geo-Spectrum is a power company but they did not name Geo-Spectrum as the lead bidder, rather put Energy Prima in the forefront,” quips a source.
Energy Prima’s notarised consortium agreement for the bid states, “The consortium of the parties shall be named as Energy Prima which will be duly incorporated under the Companies Act of Bangladesh upon its being selected as the successful bidders by the Power Cell.”
Neither Energy Prima, nor Green Power possessed any rental plants with three years’ experience. Therefore, they used the “other arrangement” part of the criterion. This “other arrangement” came in the form of letters from a number of foreign companies.
Energy Prima produced a letter from one Cemark of Thailand stating that it has booked 50MW equipment for Energy Prima. It also added a letter from Geo-Spectrum, which says it is involved in power plant ownership, building and operation for the last seven years and that it is associated with Energy Prima.
As these letters were inadequate, the Power Cell sought Energy Prima’s clarification. After this, the consortium vaguely informed that it had a number of plants in Russia, some in Europe and some in Denmark. It claimed to have “sales agreement” with a German company Power International AG on October 18, which will supply the necessary machinery.
“These still do not comply with the bid’s terms. This is a rental power bid… not just yet another typical power tender. It looks like Energy Prima went out shopping for equipment after it submitted bids. If such shopping arrangements had worked, that would have been the way rental power plants were installed worldwide,” noted an official.
Lotus Kamal group’s consortium Green Power does not even have a foreign participant. This consortium has Green Power, Bangla Trac and Desh Energy as members.
The government has been trying to sign rental power contracts for the last three years without any positive results. The last government tried to award dozens of rental power schemes to its party’s men with 15-year tender term and almost none of these bidders had any experience in power sector. Whereas rental power schemes demand each bidder must have its own power generator.
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