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Download PDF The Power Cell under the power ministry has delayed the Bibiyana and Sirajganj 450 megawatt (MW) power projects for a month under pressure from two US bidders.
The bidders AES and Chevron had been asking the bid submission date of Bibiyana power project be pushed back four to six months saying they cannot confirm availability of plant machinery due to high global demand for power plant equipment in recent months.
The Power Cell settled for moving the Bibiyana project’s bid submission date to July 15 from June 11.
Consequently, its other bidding process for Sirajganj power project will be delayed by another month. A top official of the Power Cell said the bid closing of the Sirajganj project will be in September.
The government prioritised these projects as the past alliance government failed to implement any new large power projects and contributed to the present trend of load shedding.
“There is a scarcity of engineering and procurement contractors worldwide due to high demand for power projects,” said a Power Cell source, adding, “We have to accept the fact that the bidders will have to ensure plant machinery when they submit their bids. This is why we have delayed the bid submission date for a month or so.”
On April 16, Summit Industrial and Merchantile Corporation appealed to the government to reconsider the order disqualifying it from the Bibiyana and Sirajganj project tenders.
Summit feels it was unjustly pushed out of competition by an arbitrary evaluation of World Bank’s sister concern International Finance Corporation (IFC), which is also the Bibiyana project’s consultant for the Power Cell. The IFC calculated the net value of Summit at only $35 million. The auditor’s report submitted to the Power Cell puts the figure at $120 million.
Summit filed its appeal along with a letter from SF Ahmed and Co, an auditor recommended by the Power Cell in the Bibiyana tender. The auditor’s letter reaffirmed that based on International Accounting Standards, Summit’s net value stands at $122 million.
Both Bibiyana and Sirajganj tenders now lack competition. The Bibiyana scheme has three bidders–AES, Chevron (Bibiyana gas field’s operator) and a consortium led by Powertek and the Sirajganj scheme just has AES and Powertek.
This competition shrunk due to tactics used by Powertek and its consortium partner Kepco who merged after being pre-qualified to participate in the bid, and also because of the arbitrary disqualification of Summit.
The power cell in a letter informed Summit of its disqualification to participate in the Sirajganj power project in January 10 without giving any explicit reasons. On February 14, the cell in another letter disqualified Summit in the Bibiyana project citing reasons which Summit thought was wrong and unjust.
Summit’s disqualification surprised all power industry operators as it had gained a stable reputation in the power sector for nearly 10 years. Presently operating the 100MW Khulna barge-mount plant and several small power plants, Summit was previously about to be awarded with the 450MW Sirajganj power project in 2004.
Summit had also finalised finances from the World Bank and the Asian Development Bank (ADB). However, the-then prime minister Khaleda Zia had cancelled awarding the project without citing any official reason. Unofficially, she did so as the chief of Summit was considered close to her political rival, sources said.
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