Joint venture co may get nod for 50 mw plant at Sikolbaha

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FHM Humayan Kabir
The government is likely to award contract within this December to install a costly 50-megawatt (MW) oil-fired rental power plant at Sikolbaha in Chittagong, officials said.
A Hong Kong-Bangladesh joint-venture company has been selected to set up the plant using cheap but environmentally hostile Heavy Fuel Oil (HFO), a Power Division official told the FE.
The Power Development Board (PDB) will purchase power from the power plant operator at Tk 8.77 per kilowatt-hour, Director General of the Power Cell Mohammad Abdul Jalil told the FE Monday.
A Hong Kong-based company -- Royce Power Engineering Ltd -- and Bangladeshi Asian Entech Power Corporation have been selected.
The Power Cell was appointed for selecting a bidder for setting up the power plant at Sikolbaha for supplying electricity to the energy-hungry port city.
"We've sent the proposal, submitted by the Hong Kong-Bangladesh company, to the highest public purchase body of the government for giving approval to install the power plant," Mr Jalil said.
The government's purchase committee will meet today (Wednesday) in the Secretariat in Dhaka.
Mr. Jalil, the chief of Power Cell, said the three-year 50MW rental power plant would be set up mainly to supply power to the energy-hungry and industrial hub Chittagong region.
If the purchase committee approves the proposal of the selected bidder the PDB will award contract for installing the plant and will also sign another deal for purchasing electricity.
The selected company will get six months' period for setting up the plant from the contract awarding date.
The Power Division official said the Royce Power had no adequate experience in installing and operating power station.
The company has also not submitted any environmental plan as HFO-based plants need separate treatment facility to minimise environmental hazards, he said requesting anonymity.
Presently, the Khulna 110MW power plant is HFO-based. Summit spent US$8.0 million extra (not required for diesel-based plants) just to address the environmental problems caused by the fuel.
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 of operation is lower as the price of diesel is almost double that of HFO. As a result, in the long run the cost of power from an HFO plant is lower than that of its diesel counterpart, the official said.
Following the severe power crisis the Caretaker Government decided to install some short-term power plants like small and rental ones to weather the crisis.
The Power Cell had made a number of small 15-year rental power deals since 2006, but most of those failed to come into operation in time and the deals went to incompetent and inexperienced companies.