Re-evaluation of Powertek's bid for Bibiyana plant urged

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FE Report
The council of advisers on government purchase Tuesday asked the power ministry to re-evaluate proposals of the lone bidder Powertek for installation of Bibiyana 450 megawatt (MW) power plant in the country's northern region.
The bid evaluation committee of the power ministry has been asked to re-evaluate the bid at a meeting chaired by finance and planning adviser Dr AB Mirza Azizul Islam.
The bid evaluation committee for the Bibiyana power plant, headed by power cell director general Abdul Jalil, will re-evaluate the bid of the Powertek, a consortium consisting Malaysian Powertek and Korean Kepco, and place it to the council of advisers soon as per the directives of the advisory council's meeting, said a senior power ministry official.
"I have come to know such directive of the council of advisers, but have not received its officially," the bid evaluation committee chief told the FE Tuesday.
He said necessary actions will be taken after getting the formal instructions.
Sources said the Power Development Board (PDB) will have to spend over Tk 80 billion more for purchase of Bibiyana power from the lone bidder Powertek consortium in comparison with the tariff of the existing large power plants during its lifetime of 22 years, if it is accepted.
The Powertek consortium has offered to sell electricity to PDB at a flat tariff rate of 4.53 US cents per unit (1 kilowatt-hour), while 360 MW Haripur power plant is now selling electricity at 2.73 US cents.
The power ministry was in a dilemma over selecting the lone bidder Powertek consortium for setting up the Bibiyana 450 MW power plant as the consortium submitted an 'unprecedented' proposal of higher tariff rates.
The ministry for the first time had to seek comments from two separate ministries - law and finance - and constituted a committee to scrutinise the legal grounds of the company's conditional offer and relevance of higher tariffs.
In its bid the Powertek consortium had imposed a condition that the government will 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.
The consortium, however, withdrew the condition later.
Earlier, the bid evaluation committee recommended the selection of the consortium saying it would not be right to compare the proposed price of Bibiyana power with those of the previous large power plants as the previous ones were installed over a decade ago.
Over last decade, prices of power plant equipment went up and as the project cost of Bibiyana will be more than doubled the power tariff of Bibiyana will be high, the committee justified.
Although it seems high the price offered by the consortium is justified in comparison with the international market rates, the bid evaluation committee noted earlier.