Bangladesh News

The Bibiyana 450-megawatt independent power project is set to face lack of competition, as two of the four pre-qualified bidders are going to merge and bid as one consortium.

Korean power company Kepco and Malaysian Powertek along with its partner Siemens Project Ventures have informed the Power Cell of the power ministry on February 11 and 13 that they want to form a consortium.

The new consortium will put Powertek in the lead bidder’s position. Powertek’s parent company Tanjong Public Limited Company last year purchased the local Haripur 360mw, Meghnaghat 450mw and the NEPC 110mw power plants.

Two other pre-qualified bidders are US companies — Chevron, which has discovered and developed Bibiyana gas field, and AES. Advised by International Finance Corporation (IFC), the government in October opened the pre-qualification process of Bibiyana power project.

Sources said Powertek and Kepco may also go for similar consortium in the upcoming bids for 450mw Sirajganj and 450mw Meghnaghat-3 projects.

According to sources, AES last week expressed its concern to the Power Cell about allowing two short-listed companies to merge. The Cell has however not responded to this concern. Later, the AES team left Bangladesh without visiting Bibiyana power plant site as arranged by the Power Cell.

Usually, pre-qualified bidders are not allowed to “get together” and submit a joint bid, after qualifying separately, as it limits competition.

A source said: “This is allowed only if the number of pre-qualified companies are many and a combination between the firms does not significantly reduce the number of potential bidders.”

In this case, if the new consortium wins the bid amid little competition, Bangladesh will have to deal with a monopolistic situation in the private power sector.

“Earlier, local agents of one of the bidders campaigned hard against pre-qualification of the local Summit Group in partnership with British GE.

Summit has good track record that qualified it to participate in the bid, but there were some shortcomings in its bid document.

“The Power Cell ultimately disqualified Summit, leaving the number of pre-qualifiers to only four in the beginning,” the source added.

Another interested bidder, YTL Power of Malaysia was similarly disqualified because of minor shortcomings.

Kepco in its February 11 letter pointed out that it will withdraw as a pre-qualified bidder once the Power Cell approves its admission to the Consortium. It noted that the new consortium will comply with the financial and technical criteria of the pre-qualification document.

Powertek on February 13 wrote a similar letter. It noted, “There will be no change to the Lead Member and the Operating Member and the PB [Pre-qualified Bidder] will remain as the Lead Member and the Operating Member of the Reconstituted Consortium.”

The PB will have 51 percent participating interests in the consortium.

Meanwhile, the Power Cell held pre-bid meetings with the pre-qualified bidders on February 12-13.

AES, Powertek, Kepco and Chevron attended the meeting that was led by representatives of the bid’s consultant IFC along with the director general of the Power Cell.