Govt yet to sign deals with small IPP bidders

FE Team | Published: September 08, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

S M Jahangir
The government is yet to sign agreements with the bidders selected for setting up 10 small power plants. The selection process was completed two months back.
The inordinate delay in the signing of the agreements contradicts the government's apparent urgency to reduce the country's electricity shortfall in the medium term.
The government's purchase committee approved the bids more than two months back.
The Power Division officials, however, attributed the reason behind such delay to the non-completion of vetting process by the law ministry.
"The proposals for the signing of the deals on the installation of such small power units still await the law ministry's approval," said an official.
The Power Division official also mentioned that after getting approval from the law ministry, the proposed agreements would be sent to the National Board of Revenue (NBR) for the settlement of tax-related matters.
According to officials, each of selected bidders has to sign two agreements for installation of the small power units, having generation capacity between 10 megawatt (MW) and 30MW.
On the one hand, the selected bidders have to sign deals with the power distribution companies for selling electricity, on the other, they will also require signing agreements separately with gas distribution companies to purchase natural gas for running the power plants, they noted.
A senior Power Division official, however, said, "Any further delay in the completion of ongoing vetting process could hamper the timely installation of the proposed power units."
After signing of the agreements, the proposed projects will require at least 15 months more to go into generation, the official noted.
The Advisory Committee on Public Purchase at its July 2 meeting approved the fresh tender proposals for setting a total 10 small power plants, having a combined power generation capacity of 200MW.
Among the bidders, the Summit Power has been selected for setting up three units, each having generation capacity of 30MW, in Comilla, Narayanganj and Gazipur while it has offered to install another 10MW-plant at Ullapara in Sirajganj.
Asian-Entech Power Corporation Ltd (AEPCL) will set up three plants with 20MW capacity each in Feni, Tangail and Narsingdi, official sources said.
Regent Textile Mills Ltd has won the bid for setting up a 20 MW at Barabkunda in Chittagong while the Energypac-Confidence has been selected for installing a 10 MW unit in Habiganj.
Besides, the Purchase Committee has accepted the offer of the Saiham Power for installing a 10 MW power plant at Mohipal in Feni.
All the bidders had been selected through re-tendering among the 37 pre-qualified bidders, which helped the government save more than Tk 4.11 billion on account of electricity purchase from the companies from their previous offers, official sources said.
Earlier, the purchase committee cancelled the previous offers for installation of such power projects on ground of lack of transparency in the tendering process coupled with high rate quoted by the bidders.
The government adopted a policy on setting up of small IPPs under the private sector nearly three years ago to help reduce the country's prevailing power shortfall.
The move to install the small IPPs is one of the government's medium-term strategies for meeting the country's ever-growing power demand, officials said.