Bibiyana power project gets into controversy

Dhaka: The number of pre-qualified bidders, who will take part in the tenders for setting up the 330-450 megawatts Bibiyana independent power plant, has come down to three from four as the government has approved the merger of two bidders.

The Power Division on March 4 approved the Power Cell recommendations for merger of Korea Electric Power Corporation of South Korea and a consortium of Powertek Berhad of Malaysia and Siemens Project Ventures GmbH of Germany.

Kepco and the consortium of Powertek and Siemens were earlier declared pre-qualified along with two bidders from the US – AES Corporation and Chevron Corporation – to take part in the technical and financial tenders for setting up the large IPP.
In the merged consortium, Powertek will be the lead sponsor while Siemens and Kepco its partners.

The merger of pre-qualified bidders, however, caused controversy as many industry people fear that such merger would make the affair less competitive and the tariff of power offered by the bidders would be high.

But power officials say they do not think the merger will make the affair less competitive. ‘Rather the opposite may happen. Maybe the merged consortium will be in a better position to offer a lower price and to outwit them, other bidders may also reduce their offer’, said a high official of the Power Cell defending the decision to allow the merger.

According to different media reports, AES – one of the pre-qualified bidders – has already protested at the merger.

When asked why the government had approved the merger, a high official of the Power Division said that as per the pre-qualification documents there was no bar to such reconstitution of the bidders. ‘If the lead sponsor remains the same and new partners with capabilities join it, we cannot prevent that’, he said.

The Power Division on March 4 also asked the Power Cell to hold a meeting with Summit Industrial and Mercantile Corporation in presence of the consultants of the International Finance Corporation and the Asian Development Bank to explain the reason for the exclusion of the company from the Bibiyana and 330-450MW Sirajganj independent power plant bidding process.

A consortium of Summit and GE Energy of the US was declared ‘non-qualified’ by the Power Cell as the IFC and ADB consultants and the tender evaluation committee, headed by the Power Cell director general, found that Summit ‘did not fulfil financial requirements’.

Summit, however, submitted an application to the government seeking review of the decision to drop it from the bidding process claiming that the decision was ‘not based on facts’ as it had ‘enough financial strength’.