GE surprised at power bid cancellation

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President of General Electric Power Company Stephen R Bolze has expressed surprise over Power Cell’s rejection of their joint bids with Summit in two major power projects on grounds of the latter not having “enough” financial strength.

“We’ll sit with the projects’ consultant International Finance Company [IFC] to discuss this matter. Summit is surely a capable company,” said Bolze in an interview with The Daily Star on Tuesday. He was in Dhaka for a one-day visit on business purpose.

Power Cell in January rejected the bids in consultation with IFC, which may also finance the successful bidder of the Bibiyana and Sirajganj 450 megawatt power projects. The bids submitted by Summit Industrial and Mercantile Corporation had 20 percent stakes held by GE.

After dilly-dallying an explanation for the rejection, Power Cell late last month said the tenders required the bidder’s net financial value to be over $100 million. The IFC’s assessment determined that Summit’s net value is $32.5 million, though Summit submitted auditor’s copy stating its net value as $121 million.

This evaluation surprised most industry operators, since Summit was good enough for the World Bank and the Asian Development Bank’s financing for the Sirajganj 450 MW power project in 2004. The Khaleda Zia-led government on political grounds had cancelled that project.

Having no stake in the power sector, Power Cell, which is an arm of the power ministry, after three years of the cancellation is now holding the tender for the same Sirajganj power project with IFC as its consultant.

“But this time, it’s IFC which is telling the Power Cell what it should do,” said a source. “The Cell has its own bid evaluation committee to decide matters like this. But unfortunately the cell is not utilising that committee.”

The Daily Star asked global power giant GE Power’s chief whether he struck alliance with local Summit without verifying its financial strength. “The GE did its due diligence with Summit. This is why we will take up this matter with IFC,” he said.

Power Cell’s rejection of Summit’s bids reduced competition in these two major power bids. The Bibiyana tender will now have only three competitors and Sirajganj just two.

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