Bangladesh News

The first of six costly rental power plants enters service today in Khulna. The 40-megawatt (MW) petroleum-powered plant installed by British company Aggreko launches six days behind schedule.

Sources said the launching dates of the remaining five plants will be more than a month behind schedule, in fact some of the plants would launch more than two months behind schedule.

The caretaker government had awarded the six power contracts to minimise load-shedding during the summer.

The Khulna plant will be the first successful power venture initiated by the caretaker government. It approved the costly deals considering that only such rental power units can be installed within 120 days of contract and these can minimise the summer power cuts.

Of the remaining five rental power projects, four were awarded to an inexperienced shell consortium Energy Prima owned by Moazzem Hossain of Hosaf Group. Moazzem Hossain is one of the accused in the Barapukuria coalmine corruption case filed by the Anti-corruption Commission (ACC).

Sources said Moazzem, brother of former BNP lawmaker Mosharraf Hossain of Feni, is being backed by a strong lobby.

The other project was awarded to Kaltimax-GBB under the banner of Venture Energy Resource. GBB is an inexperienced local power company that failed to install a rental plant in Bogra in the past.

Apart from Aggreko, all other rental power plant contractors are supposed to pay $500 per MW a day as compensation for failing to bring their plants online on the scheduled date May 15.

Aggreko’s scheduled date was May 28 subject to the supply of fuel, which the Power Development Board (PDB) failed to provide on time.

However, none of the power companies are paying any fine as the Power Development Board (PDB) did not even make any claims. Energy Prima should be paying $85,000 and Venture Energy $16,500 a day from May 15 for failing to meet the deadline.

Sources said of the five, only the 50MW plant in Kumargaon may be operational after June 15–a month behind schedule.

During a meeting chaired by the power secretary Sunday, Moazzem Hossain claimed that his Shahjibazar 50MW plant may be operational on June 25, 40 days behind the Commercial Operation Date (COD), Fenchuganj 50MW plant on August 7, 82 days behind the COD and a plant in Bogra on July 15, two months behind the COD.

Moazzem blamed cyclone Nargis, which swept through Myanmar last month, for failing to install the Kumargaon plant on time.

Representative of GBB at the meeting claimed that its Bhola 33MW plant may come into operation sometime in July.

As per the contracts, if a contractor fails to bring the power plant online 60 days behind the COD, the contracts will be terminated. The power secretary reminded the bidders of this rule in the meeting.

A PDB expert told The Daily Star, “The Kumargaon plant may be operational in June… the others are unlikely to come into operation even in July.”

Energy Prima did not do anything in Bogra or Fenchuganj, even though it made some progress at Shahjibazar. Kaltimax-GBB, on the other hand, did not even open a Letter of Credit (LC) to import the turbine for the Bhola 33MW power plant.

Sources said Petrobangla has installed everything required to provide gas to Kumargaon, Shahjibazar, Fenchuganj and Bogra plants. It has also arranged for equipment for gas supply in Bhola but did not install it as the GBB has not built any solid structure at the site.

After Energy Prima and GBB failed to meet their May 15 deadline to launch their respective plants, the PDB served them with notice of default a week later. Aggreko was served with a notice of default too and a notice of contract termination on May 28 for failing to meet its deadline.

Aggreko, however, responded saying that as per the contract the PDB is supposed to supply the fuel for the plant 15 days before its COD. Instead, the PDB supplied the fuel on May 23. As per the contract, the COD will be set 15 days after the fuel is supplied. Therefore, Aggreko’s actual COD is June 7.

The company later said that it was ready to supply power from June 3.

“The Khulna plant was all set to begin operation on May 28. But, at the last moment Aggreko realised that it did not have any 132KV cable-jointer to connect the plant to the national grid. Aggreko thought this jointer was available locally. Later, it imported a number of jointers for the purpose.

The Power Cell 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 offer for the eighth location and received two more such offers.

On January 15, the PDB signed six rental power deals totalling 220MW with Energy Prima, Venture Energy Resources and US company Alstom and on January 28, signed the deal with Aggreko. The Alstom deal fell through within the first two months.

As per the contracts, the rental plants have to begin operation 120 days from the day of signing of the agreement.