PDB's hasty bid process unnerves power bidders

The government's failure to make much headway in several tenders for power projects and floating of fresh tenders without ensuring gas supplies in last one year are making aspirant bidders nervous.
The executives of a few power companies consider "hasty" and "discouraging" the Power Development Board's latest bids for five private power projects of 900 to 1,275 megawatt capacity as the bids offer little time gaps to prepare documents for such large-scale ventures.
They have also been discouraged by the fact that despite repeated commitments, different government agencies have failed to complete tender processes of six power projects totalling around 1,400 MW capacity in the last one year.
The government's poor handling of tenders for eight rental power projects of 530 MW capacity and 10 public sector projects of 810 MW capacity has also shaken confidence of the investors.
Since February, PDB launched the bidders' pre-qualification (PQ) process for five private power projects totalling maximum 1,275 MW capacity. These are Meghnaghat 2 dual fuel (300-450 MW), Bibiyana 2 gas-fired (300-450 MW), Bhola 150-220 MW gas-fired, Syedpur 100 MW fuel oil and Katakhali 50 MW fuel oil-based power projects.
The PDB aims at completing all the tender processes within this year.
In the tender notice, PDB has not given confirmation about gas supplies for the Meghnaghat, Bibiyana or the Bhola projects.
Out of the five, the PQ tender document dropping date for the Meghnaghat project is set on March 23, while the rest on May 2, giving the bidders just 45 days to prepare their documents.
But the power companies say for large projects like Bibiyana or Meghnaghat, they need at least two months timeframe for preparation.
"It's because the bidders not only prepare their documents on experience and financial condition but also they contact with power plant equipment manufacturers to ensure a primary confirmation for the bids," comments an executive requesting anonymity.
"When things are being done in such a hurry, good bidders would not be able to complete their documents with due diligence," says another executive.
But the power board executives do not completely agree that the bids are being conducted in a hasty manner.
"We have given 45 days to prepare PQ documents. This should be enough. If bidders feel that this is too inadequate for preparation, they can seek extension of the deadline and we will consider that," observes a top official.
On the question of absence of gas supply guarantee, he adds guarantee for gas supplies to the Bibiyana and Bhola projects would be provided after the PQ documents are provided. In Meghnaghat project, guarantee for gas would not be required as it is a dual fuel project.
Sources say the power ministry has already sought Petrobangla's confirmation of gas supplies for Bibiyana 1 and 2, Bhola, Meghnaghat and Sirajganj projects.
Petrobangla is likely to confirm gas supplies to Bibiyana and Bhola projects but it is yet not ready to confirm gas supplies to Meghnaghat or Sirajganj projects.
The other tenders facing unusual delays due to outside pressure or tender authorities' incapability are Bibiyana 450 MW plant under the Power Cell, two 150 MW plants in Siddhirganj and a 360 MW plant in Haripur under the Electricity Generation Company of Bangladesh (EGCB), and Khulna 150 MW and Sirajganj 150 MW plants under the Northwest Power Generation Company (NWPGC).
The PDB feels that this was happening because the government had unnecessarily created too many companies to handle too little power generation and transmission. "There is a lack of coordination and lack of expertise in these organisations," quips a senior PDB official.
The Bibiyana tender saw its failure back in 2008 as it drew no competition. The Power Cell floated fresh tender in April last year. But till now, the tender made no significant progress. As a result, power companies are questioning the justification of floating the Bibiyana 2 power project.
But PDB aimed to complete the Bibiyana 2 tender process before the Power Cell could finish its own, sources say.
The other tenders floated by mid-2009 are also suffering different kinds of setbacks due to poor determination of the EGCB and NWPGC in getting the tenders through against all odds, sources say.
Influential local agents of different power companies are trying to influence the outcome of all of these tenders, the sources add.