The Power Development Board (PDB) is upgrading two Russian-built old gas-fired power units in Ghorashal to double their electricity generation capacity without increasing their gas consumption in a couple of years.
This half a billion dollar solution would give these plants at least 20 years of new life, while the electricity cost would be very low, said a PDB official.
According to a decision taken on the basis of a feasibility study last year, the PDB floated tenders to upgrade or “repower” the decades-old Ghorashal third unit 210 megawatt power plant last year.
Swiss Alstom and Chinese CMC won the tender late last year and signed an engineering, procurement and construction (EPC) contract.
In repowering technology, the heat-based Ghorashal unit will be turned into a combined cycle one to produce 416 MW power.
In combined cycle technology, the heat that escapes from the basic power plant is trapped and utilised for additional power generation.
Alstom and CMC will arrange finance for this construction, which will be around $250 million. But they are yet to manage the fund.
On Monday, the PDB closed another tender for the Ghorashal sixth unit that has remained out of order since July 2010 due to human errors.
Although repairing the unit would have taken just around $30 million, the PDB's attempts to repair it through restrictive tenders failed due to pressure from different lobbies to bag the job.
This is why the PDB decided to go for a total overhaul of the plant.
But, due to several tender term restrictions, this tender was participated in only by Alstom-CMC and Spanish El Saldo, although a dozen companies purchased the bid documents, officials said.
A source familiar with the matter alleged that the bid terms were prepared just to favour Alstom-CMC, and ensure that other major companies cannot participate.
One of the world's largest power plant manufacturers GE, USA and Spanish company TSK had requested the PDB to relax some of the restrictions in the tender terms, which the PDB did not entertain.
These bidders sought to extend the bid submission date to July; relaxation of a condition that a bidder cannot participate in the tender if it was currently engaged in two ongoing power projects; or having at least 40 percent stake in two 350 MW power projects in the last 15 years, including one repowering project.
"We did extend bid submission deadline by 19 days (it was originally set in April), but we did not entertain the other requests because from our experience we found that if a company is involved in more than two running projects, they cannot properly carry out a third project," said a PDB official.
"We opted for a high capacity solution so that this 210 MW plant gets to generate more than 400 MW power and no less. So we did not entertain another request to allow bids of less than 400 MW capacity," he said, adding: "But this was not done to favour Alstom-CMC."
Each of the two units of Ghorashal plants consumes 45 million cubic feet per day (mmcfd) gas. Given the perennial gas crisis, the repowering technology gives a very cost effective solution to the country, the official said.
The gas efficiency of these plants is now 33 percent. It will exceed 50 percent after the conversion.
"The per kilowatt construction cost for the Ghorashal unit-3 will stand at $623, whereas it costs $871 for the Bibiyana three project and $974 for the Ashuganj 412 MW power projects," he added.