The government has floated the tender for its apparently last gas-based large power project in Bibiyana with a term that many say would either bog down the bidding process or create controversies.
For the first time the Power Development Board (PDB) is going to use its own fund to finance this 400 megawatt South Bibiyana power project, which would be built in place of the cancelled Bibiyana-1 project with local company Summit.
This might be the last gas-based power project considering perennial gas supply shortfall. Unless a remarkable new gas reserve is found, the government would not go for any such power schemes.
While floating the tender on Sunday, the PDB asked bidders to drop their technical and financial proposals in two separate envelopes. This means the technical proposal would be opened first and if the bidder is found to be technically qualified, its financial proposal will be opened next. This is considered as a standard practice in case of such tenders.
But the PDB on Monday amended the term asking the bidders to drop both technical and financial proposals in the same envelope. This means the PDB would open both the proposals together and would declare lowest “read out” prices of all bidders even if they are later found out to be technically disqualified.
“We have done it to save time,” said PDB Director of Design and Inspection Khaled Mahmud, adding, “Usually the two-envelope tendering process claims five to six months to complete evaluation. But in one-stage two-envelope tender would help us quickly select our best bidder.”
He added the pre-bid meeting would be held in early March, the tender would be opened on April 1, and the PDB aimed at completing the tender within May.
“Of course when we open the bids we will declare the lowest 'read out' prices of the bidders. But that would not determine the lowest responsive bidder. We will then technically evaluate their proposals and evaluate the total financial package to determine the actual lowest responsive bidder as per the tender terms and conditions,” he noted.
The PDB official added the organisation floated tender for around 10 public sector power projects in similar manner in 2009. “All of those power plants have come into operation, mostly within the deadline,” he pointed out.
However, the PDB in 2009 actually could not award all the 10 power projects in one go, and a few had to be re-tendered.
Insiders say the one-envelope tender system would create the scopes for inefficient bidders to bag the deal quoting low price by influencing the PDB in different ways to overlook their technical shortcomings.
A remarkable aspect of this project is financing it under the PDB's “Maintenance and Development Fund” that was opened in mid-2011. This fund was opened as per a directive of the Bangladesh Energy Regulatory Commission and is powered by monthly deposit from a part of PDB's power sales.
PDB officials say the fund currently has around Tk 1,600 crore. “Every month it is increasing by Tk 50-60 crore,” an official informed.
“We would need to pay to the South Bibiyana contractor after one year of signing of the contract. Therefore, there would not be any problem financing it,” the official added.