Review of Bibiyana power plant tender sought

The power ministry is seeking the opinion of the government's Central Procurement Technical Unit (CPTU) to see if the ongoing tender process of the 450MW Bibiyana Power Project complies with the procurement rules.
As the cabinet's purchase committee last month raised a number of questions about the Powertek Consortium--the tender's lone bidder from Malaysia and South Korea--and its bid, the ministry recently turned to CPTU of the Implementation, Monitoring, and Evaluation Division (IMED) of the planning ministry.
"Based on the CPTU's review we shall ask the Power Cell [which floated the tender] to re-evaluate Powertek's bid," said a top source of the ministry.
The purchase committee had observed that the tariff offer of Powertek was too high and also the formation of Powertek Consortium was questionable. Malaysian company Powertek and Korean Kepco were pre-qualified along with other bidders back in January. Soon after the pre-qualification, Powertek and Kepco declared to form a consortium, thus narrowing down competition in the tender process that eventually drove away all other bidders.
Meanwhile on October 21, Powertek in a letter to the Power Cell reduced its proposed power tariff to US 4.399 cents from 4.53 cents.
Powertek's 22-year tariff offer is almost double that of the 450MW Meghnaghat project that offered 2.78 cents. In terms of taka, Powertek's offer stands at Tk 3.15 per unit while other developers now implementing small power projects seek a price of Tk 2.28 to Tk 2.79 per unit.
On October 22, Power Cell's consultant International Finance Corporation (IFC) in an e-mail said in terms of taka this tariff offer is Tk 2.38 per kilowatt hour (or a unit), which is 1.4 percent higher than the small power projects offering Tk 2.35 a unit, but equivalent to the tariffs for the larger 30MW small power projects.
The IFC said the government was currently renting 260MW at an average cost of Tk 7.252 per unit. "This is more than double the cost of the revised tariff offered by Powertek Consortium for 450MW at Bibiyana," said the letter.
A ministry source said the cell did not seek the IFC opinion on the matter at this point. The IFC comparison of power tariffs of rental power projects, some of which operate on costly petroleum oil, versus a large conventional gas based power project also lacks level playing field.
The IFC also did not obtain the actual price data of the small power projects before advocating for Powertek's reduced price, the source noted.
The power secretary on several occasions said the easily installable rental power projects would be costlier than conventional large power projects.
The Bibiyana tender initially attracted pre-qualification bids from AES, Chevron, Powertek, Kepco, Summit and Malaysian YTL late last year. Summit was conditionally selected at first but then in January it was arbitrarily disqualified; YTL was also disqualified. Previously qualified for the Sirajganj 450MW power project, Summit repeatedly requested the Power Cell to reconsider but it was ignored.