Powertek reduces electricity tariff

---

M Azizur Rahman
Powertek consortium, the lone bidder for construction of Bibiyana 450 megawatt (MW) power plant, has reduced electricity tariff through a change made to its original offer.
The consortium, consisting Malaysian Powertek, German Siemens and Korean Kepco, has this time offered the government 4.39 US cents per unit (1.0 kilowatt-hour) for supplying electricity from the proposed Bibiyana plant. The original rate was 4.53 US cents per unit, a senior power ministry official said.
The reduced tariff offer from the Powertek, however, came at a time when the power ministry was working to re-evaluate the consortium's original tariff offer following directives from the council of advisers on government purchase.
The council of advisers during a meeting on October 7, 2008, chaired by finance and planning adviser Dr AB Mirza Azizul Islam, also opined that the tariff rate offered by the Powertek consortium was higher than the levelised tariff rates of other power plants in the country.
The levelised power tariff of the Meghnaghat 450 MW power plant was only US cents 2.79 per unit though gas price for both Bibiyana and Meghnaghat remains same, said a power ministry official.
The meeting of the council of advisers also dubbed the joint venture of Malaysian Powertek, German Siemens and Korean Kepco after their pre-qualification in the Bibiyana bidding as 'illegal.'
"The tariff offered by the Powertek consortium was much higher compared to the falling global market following the financial meltdown," Chief Adviser's special assistant on energy issues professor M Tamim said in a comment on the consortium's original price.
"I have received the tariff reduction offer from the Powertek through the bid evaluation committee today," power secretary Dr Fauzul Kabir Khan told the FE Thursday.
He said the Powertek's proposal has been sent to the central procurement and technical unit (CPTU) for approval.
The Powertek consortium in its previous change to the original bid withdrew a condition where it sought that the government would have to pay up to US$ 15 million for cancelling the project before its 'financial closure' though it refused to accept any responsibility for delay in financial closure on their part.
But as per the request for proposal (RFP) document of the Bibiyana project the financial closure, which means arrangement of financing to be the sole responsibility of the bidder.
The consortium withdrew the condition in August last when comments from the ministries of law and finance were awaiting over the conditional offer.
The power ministry had termed the conditional offer 'unprecedented' and sought comments from these ministries to scrutiny its legal and fiscal aspects.
The Powertek consortium became the lone bidder as the two other competitors -- the US based AES Corporation and Chevron Corporation -- did not submit final bid.
The local Summit Industrial and Mercantile Corporation Ltd (SIMCL) that was selected preliminary could not compete in the final bidding as the Power Cell, an entity under the ministry of power, disregarded certification of the SF Ahmed & Co over SIMCL's financial status and announced the SIMCL-GE consortium disqualified.
Despite repeated pleas from the SIMCL for qualifying it to compete in the final bidding the power ministry disregarded the appeals without seeking comments from the law ministry, it was alleged.
The SIMCL was ready to offer much lower rate than the Powertek consortium, if it were allowed to take part in the final bidding, a company insider claimed.