Bangladesh News

A chartered accounting (CA) firm gave its independent opinion that Wartsila-Summit group was the lowest bidder in the tender for installation of the 100 megawatt oil fired barge-mount Khulna power plant.

This contradicts the case filed by the Anti-Corruption Commission (ACC) on September 2 last year.

The ACC accused that the then prime minister Sheikh Hasina and six others through mutual understanding and use of influence helped Wartsila-Summit group win the bid depriving the lowest bidder — New England Power Company (NEPC).

But reviewing the project’s bid documents, Chartered Accountants and Management and Tax Consultants SF Ahmed & Co gave its opinion that NEPC was wrongly rated as the lowest bidder.

In fact, NEPC was also non-responsive in the tender as its financial offer was conditional vis-à-vis the tariff for fuel, says the report of the accounting firm.

Following the ACC case, Summit Industrial and Mercantile Corporation approached SF Ahmed & Co on September 13 to give its professional opinion on selection of the lowest bidder from among the bids received in response to Request For Proposal (RFP) for the Khulna plant and the government policy on import of fuel for this plant. The firm completed its report on September 18.

Verifying the price offers of both NEPC and Wartsila in the light of various pricing factors like base fuel price, the firm reported that the bid evaluation report of Power Development Board’s (PDB) tender committee headed by the chief engineer dated March 2, 1997 judged NEPC as the lowest bidder without considering fuel tariff suggested by the company. NEPC gave a condition — fuel price of Tk 3.3 per litre plus an annual escalation factor of one percent.

“The evaluation of tariff made on the basis of the above price of liquid fuel was not correct because 1. The indicative price of liquid fuel (furnace oil) was specifically suggested at Tk 4.51 litre which ought to have been used… and 2. Fuel cost being a pass over item, annual escalation factor of 1% quoted by NEPC is redundant,” the accounting firm said in its report.

“It is a universally accepted fact that while comparing two or more financial numbers, the competing parties must be…allowed identical parameters. In other words, base fuel price of Tk 4.51… ought to have been applied for bids of both Wartsila as well as of NEPC. Therefore, it is our unreserved opinion that the lowest bid is US cents 0.040888 kWh which was offered by Wartsila. It may not be out of place to mention that the offer of NEPC, which was wrongly rated as lowest bidder, was also non-responsive as their financial offer was conditional vis-à-vis the tariff for fuel.”

The firm did not find any foul play regarding import of fuel exclusively for the plant. “For uninterrupted operation of the power plant, it is quite natural that all avenues for timely availability of the most essential ingredient, i.e., fuel must be ensured, ” it said.

The ACC in its case said the PDB invited international tender on October 24 of the same year to commission three barge-mount power plants at Haripur, Shikalbaha and Khulna within eight to 10 months.

A total of 15 firms submitted 25 tenders, 18 of which were qualified primarily.

NEPC consortium proposed the lowest tariffs but no deal was made with the company, the case statement said.

Besides, initiatives were taken for negotiation with the first, second and third lowest bidders following illegal interference by the then prime minister Sheikh Hasina and then power secretary Dr Towfiq-e-Elahi Chowdhury.

Ignoring the lowest bidder’s tariff rate — 4.59 cents per kilowatt hour– power tariff has been fixed at 5.10 cents per kilowatt hour for three months and 5.82 cents per kilowatt hour for the rest of the contract period.

Hasina approved the deal in connivance with other accused to serve the interest of a special quarter in a pre-planned way through deception.

Arrangement to smuggle foreign currencies was also made by allowing Wartsila to import oil that causes a huge loss to the country, the case statement added.