Cabinet purchase body okays 5 rental power bids

The cabinet committee on purchase yesterday approved bids of five rental power projects with a capacity of generating a total of 330 megawatt (MW) electricity.
Barisal 50 MW heavy fuel oil (HFO)-fired plant was awarded to Coastal Saba, Noapara 100 MW HFO-fired plant and Bheramara 100 MW diesel-fired plant to Otobi, and Jamalpur 30 MW HFO-fired plant and Thakurgaon 50 MW diesel-fired plant to Rahimafrooz.
All of these bidders are local companies having no track record in installing and operating rental power projects before. The HFO plants will enjoy a rental contract for five years and the diesel plants for three years.
The diesel-fired plants will have to be installed within 120 days of signing the contract with Power Development Board (PDB) and the HFO-fired plants within 270 days.
With the purchase committee's approval, PDB would initiate the process of signing contracts. PDB is shelving three other rental power deals, as it was unhappy with the bids.
PDB floated the tender for eight rental plants with a capacity of generating a total of 530 MW power in late October. It wanted to complete the process of signing contracts by the end of November so that it could launch the diesel-fired plants before the next irrigation period in March.
But the initiative was delayed due to confusion over the selection of the best bidders, which will now affect the deadline.
The purchase committee meeting chaired by Finance Minister AMM Abdul Muhith also approved procurement of 3.5 lakh single phase power meters for the Rural Electrification Board (REB). REB will use these meters to expand its base of subscribers by 10 lakh more. It now serves around 70 lakh subscribers.
The cost per kilowatt of power from the diesel plant will be around Tk 14 while it will be around Tk 7 from HFO plants. PDB sells the same at around Tk 2.6 per kilowatt hour. This huge loss will have to be subsidised by the government.
Such high tariff is tolerated only in case of rental power projects as such projects can easily be installed and uninstalled. This is why PDB received unusually high response in the tender of rental power projects.
Previously the caretaker government awarded rental power contracts to novice companies like Energy Prima, Venture Energy and Precision Energy. All of these companies failed to meet the project deadline and a couple of them even have failed to generate any power till now.