The BON, however, attributes its failure to 'political instability' and Sunday requested the government to allow it an additional seven and a half months time for financial closure by amending the project's Implementation Agreement (IA).

The government is yet to take a decision on the matter.

Earlier the same company missed a deadline to pay up land rental and other fees on January 21 and faced a notice of 'Project Company Event of Default' to pay up Tk 6.22 crore by February 22 or face cancellation of the contract.

That cancellation was saved by Middle Eastern Belhasa group, which is a member of the Consortium, through submission of that money at the last minute. The PDB that gave the BON Consortium 20 acres of land for this project had remained in limbo with it.

With the consortium's lead bidder Steag (Germany) and Obaidul Karim missing from the scene, the PDB could feel that the BON would not be able to carry out the project and it was a waste of precious time not to cancel the project. "But PDB has to give the consortium some legitimate time to reach a final decision," notes a PDB official.

Now while the PDB is prepared for scrapping the deal, the BON is asking the government to keep it hanging further.

In a letter Sunday addressed to President Prof Iajuddin Ahmed, the BON Consortium asked the government to change the project's Implementation Agreement (IA) that was signed between the power ministry and the BON Consortium on March 19 to allow it more time for financial closure. The letter was signed by Director of Operations, BON Engr Noor Uddin.

This letter was supported by another one from Capital Management House (CMH) of the Kingdom of Bahrain. This letter issued on May 22, addressed to the power secretary, says that the BON requests for an amendment to the IA related to the proposed financial closing date.

It adds, "The CMH along with its group of investors is committed to contribute majority of the equity and debt financing for the project worth USD 355 million."

Referring to a last week's discussion with the ministry, the BON letter says, "Due to various factors identified by us and CMH as affecting... the Meghnaghat Phase-II power project in recent months, including... political instability following the change of Government and the public awareness of the internal investigations being conducted by the Government in relation to the project, it has not been possible to procure a suitable EPC (engineer-procure-construct) contractor or to obtain commitments from commercial financiers and/ or equity participants to the Project."

The letter noted that last week the ministry verbally confirmed that there has been "no impropriety in the award of the Project to BON", and therefore the consortium would now move forward.

Against this backdrop, the consortium says that as per the IA the financial closing date is set on May 28 -- giving it seven and a half months time since the signing of the deal last year.

In order to shift this deadline, the IA's clause 18.1 needs to be amended and the BON would be given 15 months time, instead of seven and a half months.

Industry insiders are however highly skeptic about the BON's ability to carry out the project even if such a time extension is allowed. "Neither Orion, nor Belhasa have ever installed a power project. The lead bidder Steag is nowhere to be found. There is no confidence among any EPC contractors in the BON. There is too much uncertainty over the Consortium itself," said an industry insider.

The Belhasa previously proposed that the government take over Orion's share (only 16 per cent) and drive the project on. Belhasa guarantees implementation, said one of its executives to the power ministry in February.

Sources said that a lead sponsor contractor (in this case Steag) can take over shares with permission of the PDB. The contract does not give Belhasa the room to take over Orion's shares.

Obaidul Karim, who created the BON Consortium to bag power deals using his connections with the Hawa Bhaban, is wanted by the police in different graft and criminal cases for swindling Tk 594 crore from the Oriental Bank.

The BON never actually gave the bid that was selected for this power project and it actually submitted its name as one of the two partners of a Japanese bidder Nisso Eiwi, which has the experience to qualify for building such a power plant. However Nisso disappeared from the scene in 2004 and Orion brought in another German company Steag showing it as the lead bidder. The name of the consortium remained BON -- representing Belhasa, Orion and Nisso -- though it should have been BOS.

The government initially rejected such a gross anomaly, but then under pressure from the Hawa Bhaban the government accepted and approved the bid in August 2005. Orion signed a series of contracts with the PDB and other authorities for the power project and signed the LLA, the final deal, on October 11 last year.