Record 63 bids for rental power
The Power Development Board (PDB) yesterday received a record number of 63 proposals for eight rental power projects totalling 530 megawatt in capacity, set to start being launched the next summer.
PDB Chairman Alamgir Kabir told The Daily Star that his organisation aims to sign the agreements with successful bidders within the next month, so that four diesel fired plants could start launching operations from March next, and four heavy fuel oil (HFO) fired plants may start launching from next August.
The expected tariff for power from diesel plants totalling 250MW in capacity is around Tk 14 per kilowatt hour while from HFO plants around Tk 5.
Such an unusually high response to the bid invitation does not however necessarily reflect quality bids from power companies which would actually be able to deliver the plants, sources said.
PDB had sold 117 bid documents for the tender -- which is yet another record.
The larger share of bidders represents local new faces with no real experience in installing rental power plants, the sources said. But that also goes to show the tremendous interest local investors have in the power sector. Only three or four foreign rental power companies participated in the bid.
The sources said some aggressive entrepreneurs submitted bids for most of the projects, using different signboards. Based on its past bitter experience of dealing with the aggressive ones who had bagged multiple bids but failed to deliver projects on time, PDB this time set a rule that one successful bidder will be allowed to bag a maximum of two bids.
A top PDB official said such a high participation in the bid was the result of relaxation in the tender criterion allowing investors experienced in installing only 'captive power' generation to participate in the bid. Captive power plants are basically off-grid generators installed for industrial use.
The sources said if captive power developers were barred from participation, PDB would have drawn around 30 to 40 bids.
Other factors include PDB's handling of this tender process in a transparent manner till date, floating the tender through its own website, and also support from local banks for many bidders, the sources added.
Rental power plants are different from conventional plants because the investor must own plant equipment in its stock -- ready to be installed and uninstalled on short notices. That is why the tariffs for rental power are typically higher than other types of plants'.
The diesel plants will have three years rental agreements, while the comparatively cheaper HFO plants will have agreements of five years.
The PDB conference room was packed with bidders' representatives throughout the day yesterday. Officials started opening the bids at noon in front of them, to announce the names of the bidders and their readout prices. The process was continuing till filing of this report at 8:00pm.
Two expert committees will later review the readout prices and other aspects of the bids to select competent lowest bidders. "We will surely prioritise bidders who would be actually able to deliver the plants for just and cheap prices," said PDB Chairman Alamgir Kabir. "Then again, we shall also prioritise competent local bidders."
PDB sources said six bidders submitted offers for Bheramara 100 MW diesel plant, eight are competing for 50 MW Katakhali diesel plant, six for Thakurgaon 50 MW diesel plant, and seven for Saidpur 50 MW diesel plant.
Among the bidders for HFO based plants, 11 are competing for Noapara 100 MW, four for Madanganj 100 MW, seven for Jamalpur 30 MW, and 14 for Barisal 50 MW plants.
Some of the bidders are Asian Entech, Otobi, Shasha Denims, Navana, Summit, Beximco, Bashundhara, Rahimafrooz, Square, Energy Prima, Aggreko of UK, Aggretech of Germany, Empower of UK, Shahjibazar Power, Confidence, Medlar, Powerpac, and ETC-CNE Joint Venture.
To make the bids for around 7,000 MW successful, the government earlier held a meeting with bankers informing them of how investment in the power sector is secured, and that the local banks could play a positive role in it by lowering interest rates. Several banks already committed to financing the rental power bids.
This bid will be followed by closing of tenders for 10 public sector power plants totalling 810 MW in capacity in mid November.
In December, the government will embark on a road show in the UK, US, and Singapore to attract around 5 billion dollars in investment for four 500 MW coal fired plants, Meghnaghat phase two 450 MW plant, Bibiyana phase two 450 MW plant, Bhola 150 MW plant, and for a liquefied natural gas (LNG) terminal for importing gas.
Comments