Bangladesh News

The Bibiyana 450 megawatt power project tender is likely to be cancelled as the law ministry believes bid documents of the tender’s lone bidder are so flawed that these lack legal merit for evaluation.

The power ministry had earlier made an unusual request to the law ministry to give its opinion on a condition imposed by Powertek Consortium of Malaysia and South Korea. The law ministry observed that imposing such a condition is a material deviation.

The bid originally participated by several companies finally drew only one offer because of poor handling of the tender by the Power Cell and the role of its tender consultant — International Finance Corporation (IFC) — that controversially disqualified the local Summit group.

Powertek Consortium in July imposed a condition that “Government be responsible for up to $ 15 million of Project Company’s liabilities under the EPC (Engineering, Procurement and Construction) contract if the Implementation Agreement is terminated prior to Financial Close for any reason other than a Project Company Event of Default.”

Instead of rejecting such an unusual proposal, the Proposal Evaluation Committee (PEC) of the Power Cell earlier this month forwarded this “exception” to the power ministry. The power ministry sent it to the law ministry for its opinion saying that if this exception is accepted, the bid will be considered responsive.

Giving its opinion yesterday, the law ministry expressed surprise that the power ministry had sought its advice on a matter that was not even approved by the caretaker government’s advisers’ committee on procurement. Different ministries seek the law ministry’s vetting upon approval from such committees. Nevertheless, the law ministry responded to the power ministry’s request.

Upon primary scrutiny, the law ministry noted that Powertek’s condition was an objectionable material deviation as per Rules 98 (5) and (6) of the Public Procurement Regulation, 2008. It is so because if this condition is accepted, the tender documents would be modified in such a way that could have changed the stances of other competing bidders. In other words, had the government announced that it would be responsible for $15 million worth of risk, many other companies would have submitted their bids. Therefore, accepting this condition would unfairly deprive other bidders, and favour Powertek.

The law ministry mentioned that Powertek is the lone bidder. As per the Procurement Regulation if a lone bidder’s offer is compliant with bid terms, the evaluation committee may consider the offer and seek clearance of the approving authorities by explaining why it is considering the bid.

“But in this case, the offer is not compliant with the bid documents,” the ministry noted, adding that Powertek’s offer had important deviations for which it did not qualify for consideration.

The Power Cell so far did not succeed in completing any large power project tender except that for Haripur 360 MW AES project in 1998. And till date it completed tenders for some small and rental power projects, most of which were awarded to incompetent and wrong bidders.

The Bibiyana tender initially attracted pre-qualification bids from AES, Chevron, Powertek, Kepco, Summit and Malaysian YTL late last year. Summit was conditionally selected at first, but in January this year it was arbitrarily disqualified and YTL was also disqualified. Previously qualified for Sirajganj 450 MW power project, Summit repeatedly requested the Power Cell to reconsider but it was ignored. World’s leading turbine manufacturer GE was holding 20 percent stakes with Summit in this bid.

Soon after the pre-qualification, Powertek and Kepco announced its consortium and AES announced its withdrawal. Finally, when the bid submission date came, Powertek appeared as the lone bidder.