Govt relaxes rules for rental power plants
Monday, 7 September 2009
M Azizur Rahman
The government would buy electricity from the proposed diesel and furnace oil-fired rental power plants for five years as the power ministry Sunday extended the timeframe following appeal from the prospective bidders.
The ministry earlier had proposed to purchase electricity from the rental plants for three years, which the prospective bidders opposed saying running the plants for three year's would not be cost effective.
At a meeting on Sunday the power ministry also decided to float tender for the rental power plants on September 10 and that the bidders could compete for all the eight rental power plants but would be awarded only two.
The bidders who would quote the lowest price to sell electricity would be awarded the contracts.
The meeting chaired by State Minister for Power and Energy Enamul Haque also relaxed the mandatory experience requirement to woo the private sector entrepreneurs in the bidding.
Prime Minister's adviser on energy issues Dr Tawfiq-e-Elhai Chowdhury, power secretary Abul Kalam Azad, PDB chairman ASM Alamgir Kabir and top officials of the state-owned power entities attended the meeting.
The meeting finalised the terms of reference and bidding criteria for setting up the diesel and furnace oil-fired rental power plants having the generation capacity of 530 megawatts (mw) of electricity, said a senior power ministry official.
It decided that three out of the total eight rental power plants would be diesel-fired, while the rest oil-based.
The state-owned Bangladesh Petroleum Corporation (BPC) has projected that the country would require to increase the annual fuel import by at least 25 per cent to 4.85 million tonnes from the current 3.65 million tonnes within next two years to ensure operation of the liquid fuel-fired power plants.
The diesel-fired power plants must initiate electricity generation within 120 days, while the furnace oil-run power plants within 270 days of signing the respective agreements, the meeting decided.
In default there will be a penalty of US$500 per day.
The rental plants to be set up on emergency basis are Bheramara 100mw, Noapara 100mw, Katakhali 50mw, Thakurgaon 50mw, Syedpur 50 mw, Sarishabari 30mw, Barisal 50mw and Madanganj 100mw.
The state-owned Power Development Board (PDB) will invite bids for installation of these plants on a fast-track basis.
Private sector entrepreneurs, both local and foreign, would be invited to install the projects. They have to sell their entire production to the PDB.
The power ministry has already interacted with the prospective private entrepreneurs with local companies Summit Power, Beximco Group, Hosaf Group and GBB and a number of foreign entrepreneurs responding enthusiastically.
It has also announced a timeline for holding a pre-bid conference with the prospective bidders on September 27. The closing of bid submission is on October 22 and awarding of contracts by November 19.
Tender for the public sector diesel and furnace oil-fired power plants would be floated immediately after the floatation of bid for rental plants, said the power ministry official.
The country has long been experiencing severe power outages under pressure from its burgeoning economy, which has been growing at an annual rate of around six per cent over the last five years.
The power shortfall is especially acute in the hot summer months from April to October.
Years of under-investment mean that the state-owned power plants have generated only around 3.500 megawatts of electricity a day against the peak hour demand for over 5,500 megawatts and the demand is growing by 500 megawatts a year due to rapid industrialisation.
The World Bank and the Asian Development Bank say the acute power shortfall has been a big drag on the country's bid to attain double-digit growth. The Awami League government has pledged to increase electricity generation to 5,000 mw by 2011 and to 7,000 mw by 2013.
The fast-track liquid fuel-based power generation move comes as natural gas, the country's long-used electricity generating fuel, is drying up fast with coal not an option for short term solution.
The government would buy electricity from the proposed diesel and furnace oil-fired rental power plants for five years as the power ministry Sunday extended the timeframe following appeal from the prospective bidders.
The ministry earlier had proposed to purchase electricity from the rental plants for three years, which the prospective bidders opposed saying running the plants for three year's would not be cost effective.
At a meeting on Sunday the power ministry also decided to float tender for the rental power plants on September 10 and that the bidders could compete for all the eight rental power plants but would be awarded only two.
The bidders who would quote the lowest price to sell electricity would be awarded the contracts.
The meeting chaired by State Minister for Power and Energy Enamul Haque also relaxed the mandatory experience requirement to woo the private sector entrepreneurs in the bidding.
Prime Minister's adviser on energy issues Dr Tawfiq-e-Elhai Chowdhury, power secretary Abul Kalam Azad, PDB chairman ASM Alamgir Kabir and top officials of the state-owned power entities attended the meeting.
The meeting finalised the terms of reference and bidding criteria for setting up the diesel and furnace oil-fired rental power plants having the generation capacity of 530 megawatts (mw) of electricity, said a senior power ministry official.
It decided that three out of the total eight rental power plants would be diesel-fired, while the rest oil-based.
The state-owned Bangladesh Petroleum Corporation (BPC) has projected that the country would require to increase the annual fuel import by at least 25 per cent to 4.85 million tonnes from the current 3.65 million tonnes within next two years to ensure operation of the liquid fuel-fired power plants.
The diesel-fired power plants must initiate electricity generation within 120 days, while the furnace oil-run power plants within 270 days of signing the respective agreements, the meeting decided.
In default there will be a penalty of US$500 per day.
The rental plants to be set up on emergency basis are Bheramara 100mw, Noapara 100mw, Katakhali 50mw, Thakurgaon 50mw, Syedpur 50 mw, Sarishabari 30mw, Barisal 50mw and Madanganj 100mw.
The state-owned Power Development Board (PDB) will invite bids for installation of these plants on a fast-track basis.
Private sector entrepreneurs, both local and foreign, would be invited to install the projects. They have to sell their entire production to the PDB.
The power ministry has already interacted with the prospective private entrepreneurs with local companies Summit Power, Beximco Group, Hosaf Group and GBB and a number of foreign entrepreneurs responding enthusiastically.
It has also announced a timeline for holding a pre-bid conference with the prospective bidders on September 27. The closing of bid submission is on October 22 and awarding of contracts by November 19.
Tender for the public sector diesel and furnace oil-fired power plants would be floated immediately after the floatation of bid for rental plants, said the power ministry official.
The country has long been experiencing severe power outages under pressure from its burgeoning economy, which has been growing at an annual rate of around six per cent over the last five years.
The power shortfall is especially acute in the hot summer months from April to October.
Years of under-investment mean that the state-owned power plants have generated only around 3.500 megawatts of electricity a day against the peak hour demand for over 5,500 megawatts and the demand is growing by 500 megawatts a year due to rapid industrialisation.
The World Bank and the Asian Development Bank say the acute power shortfall has been a big drag on the country's bid to attain double-digit growth. The Awami League government has pledged to increase electricity generation to 5,000 mw by 2011 and to 7,000 mw by 2013.
The fast-track liquid fuel-based power generation move comes as natural gas, the country's long-used electricity generating fuel, is drying up fast with coal not an option for short term solution.