Ctg rental power bid evaluated twice
The Power Cell is expected to complete a "second round" of evaluation of the 50 megawatt Chittagong rental power project within this week after the power ministry rejected a hurriedly done bid evaluation last month, sources say.
Upon inviting bids from various power companies on October 16, the Cell completed the evaluation within only three days. It recommended a joint venture of Royce Power Engineering Ltd of Hong Kong and local Asian Entech Power Corporation and Shasha Denims Ltd that proposed to set up the plant using cheap but environmentally hostile Heavy Fuel Oil (HFO).
Usually the authorities take up 30 days to evaluate bids and verify documents. As the Power Cell's three-day evaluation was not done on the basis of any verification, the ministry sent back the evaluation report, asking the Cell to follow the proper routine.
A top power ministry official says, "Bidders can submit different documents making big claims. They may appear to be convincing. But it's our job to cross-check these documents to see if these are genuine. Our experience says bidders often submit fake or misleading documents just to win the bid."
"We hope the Power Cell does not resort to the same type of sketchy evaluation of last month," another official said, adding based on the negative experience of the eight small rental power projects, the Chittagong tender terms and conditions were refined to find the best bidder, who would actually do the job in time.
Sources say some documents submitted by Royce-Asian Entech did not comply with the bid terms and conditions.
The tender documents say the bidder must have experience in providing rental or Independent Power Project (IPP) serving in the last three years and will furnish end-user certificate or contract documents with power off-taker in support of the experience.
Royce Power Engineering has furnished a certificate that looks like a computer printout having no official letter-head. The certificate was issued under the name of a company "Jianmen Power Plant, Jiangmen City, Guandong, China," stating that Royce power has an agreement to supply it with a 22.6mw power on rental.
The certificate has no street address or email address and the phone number mentioned in the certificate did not respond to calls.
An enquiry in that city responds that the proper name of the plant is "Jianmen Xinian Power Plant," which has a capacity of 5,000mw, and there is no power company named "Jianmen Power Plant" there.
The tender document demanded documentary evidence that the bidder has liquid fuel-fired generating units available mentioning the capacity, country of origin and etc. One page of Royce power's documents claims it has generators with 55mw capacity, in another it says it has 50mw "gas-fired" engines.
In this regard, a certificate was issued in Chinese, again without any letterhead, with a translation on the same page stating that the Royce had purchased a piece of equipment (which will be installed in Bangladesh) under the name of Changshu Marine Parts co. It is not clear why would Changshu company do this job, sources observe.
Royce also did not submit any environmental plan as HFO-based plants need separate treatment facility to minimise environmental hazards.
Presently, the Khulna 110mw power plant is HFO-based. Summit spent eight million dollars extra (not required for diesel-based plants) just to address the environmental problems caused by the fuel.
Of the three local and three foreign companies the bid drew some attractive price offers ranging between US 3.5 cents per kilowatt-hour to 5.5 cents per kilowatt-hour. Because of flexibility of plant installation, rental power tariffs are typically costlier than tariffs of the conventional power plants.
The project was open for both HFO-based and diesel-based power plants. Compared to diesel-based plants, HFO-based plants require higher investment to set up, while the cost operation is lower as the price of diesel is almost double of HFO. As a result, in the long run the cost of power from an HFO plant is cheaper than its diesel counterpart.
The Power Cell sought proposal for this 50mw plant in Sikalbaha to be expanded to 100mw capacity in future.
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