Harbin holds back commercial operation of 70-MW power plant
Sunday, 28 September 2008
FHM Humayan Kabir
The Chinese contractor, Harbin Power Engineering, is holding back the commercial operation of the 70-MW power plant at Fenchuganj following dispute over payment of advance income tax (AIT) and value added tax (VAT).
The Power Development Board (PDB) in line with the advice from the National Board of Revenue (NBR) has deducted AIT and VAT amounting to US$5.0 million from $67 million spent on machinery and equipment. "Harbin has refused to pay AIT and VAT on the money spent on the import of machinery and equipment and expressed its readiness to pay the same on the remaining amount of their income, Quamrul Bari", chief engineer of Harbin Power said.
Harbin, after winning the contract, completed the installation of two units of the new power plant a few months back. But it has not gone for commercial generation following the dispute over payment of tax and VAT, a senior power development board (PDB) official said.
However, a meeting the Harbin, the NBR and the PDB is expected to resolve the issue tomorrow (Monday), sources said.
"As per the deal with the contractor, the power plant having two units with generation capacity of 35 MW each was to start commercial operation by July 2007. But the operation has already been delayed by about 15 months," the PDB official told the FE.
The power development board (PDB) gave the work order to the Chinese company on September 12, 2005 for setting up the power plant at a cost of Tk 5.24 billion.
"We are not satisfied with the contractor's performance. We issued repeated reminder to the Harbin for commissioning the plant after expiry of the scheduled date. But it had failed to do so," said PDB chairman M Shawkat Ali.
"We told them that the dispute over tax payment will be settled once the units started commercial operation. But it is yet to comply with our request," he said.
Project Director of the Fenchuganj power project Bishawnath Halder said the contractor is yet to inform us about the date for commercial operation of the power plant though two gas turbine units are ready for operation.
Another 35MW steam turbine will be built in Fenchuganj which will take five to six month for installation, he said.
"Last time we asked Harbin to start power generation commercially at the advent of summer in June-July period so that we could supply uninterrupted power to the consumers. But it failed to do so," PDB chairman Mr. Shawkat Ali said.
The country over the last few months has been facing severe load-shedding due to insufficient generation.
The government had earlier decided to install the 90MW plant at Fenchuganj from its own resources.
The last Awami League government floated tender in 1998 for the power plant. Later the BNP-led four-party alliance government awarded the contract to the Chinese company Harbin Power in September 2005.
The Chinese contractor, Harbin Power Engineering, is holding back the commercial operation of the 70-MW power plant at Fenchuganj following dispute over payment of advance income tax (AIT) and value added tax (VAT).
The Power Development Board (PDB) in line with the advice from the National Board of Revenue (NBR) has deducted AIT and VAT amounting to US$5.0 million from $67 million spent on machinery and equipment. "Harbin has refused to pay AIT and VAT on the money spent on the import of machinery and equipment and expressed its readiness to pay the same on the remaining amount of their income, Quamrul Bari", chief engineer of Harbin Power said.
Harbin, after winning the contract, completed the installation of two units of the new power plant a few months back. But it has not gone for commercial generation following the dispute over payment of tax and VAT, a senior power development board (PDB) official said.
However, a meeting the Harbin, the NBR and the PDB is expected to resolve the issue tomorrow (Monday), sources said.
"As per the deal with the contractor, the power plant having two units with generation capacity of 35 MW each was to start commercial operation by July 2007. But the operation has already been delayed by about 15 months," the PDB official told the FE.
The power development board (PDB) gave the work order to the Chinese company on September 12, 2005 for setting up the power plant at a cost of Tk 5.24 billion.
"We are not satisfied with the contractor's performance. We issued repeated reminder to the Harbin for commissioning the plant after expiry of the scheduled date. But it had failed to do so," said PDB chairman M Shawkat Ali.
"We told them that the dispute over tax payment will be settled once the units started commercial operation. But it is yet to comply with our request," he said.
Project Director of the Fenchuganj power project Bishawnath Halder said the contractor is yet to inform us about the date for commercial operation of the power plant though two gas turbine units are ready for operation.
Another 35MW steam turbine will be built in Fenchuganj which will take five to six month for installation, he said.
"Last time we asked Harbin to start power generation commercially at the advent of summer in June-July period so that we could supply uninterrupted power to the consumers. But it failed to do so," PDB chairman Mr. Shawkat Ali said.
The country over the last few months has been facing severe load-shedding due to insufficient generation.
The government had earlier decided to install the 90MW plant at Fenchuganj from its own resources.
The last Awami League government floated tender in 1998 for the power plant. Later the BNP-led four-party alliance government awarded the contract to the Chinese company Harbin Power in September 2005.