The Power Development Board has decided to construct the Bibiyana South, a 400MW gas-based combined cycle power plant project, in Habiganj with its own fund as a private company apparently “failed” to build a power plant there due to fund crunch.
PDB Chairman Md Abduhu Ruhulla said: “The land for construction of the power plant was acquired earlier and the private enterprise,Summit Group, failed to work on the project. So, we are thinking of constructing another plant on the land instead.”
Alongside the Bibiyana south, another plant named Bibiyana 3 with 399MW gas-based power plant will be built under the PDB.
The PDB’s Energy Development and Maintenance funds worth Tk1,800crore will be used for the Bibiyana South power plant.
A power plant of this capacity requires at least Tk2500-Tk3000crore while every year nearly Tk700crore are deposited to the fund.
The gas-based power plant project was planned considering the availability of gas.
The PDB has already invited international tender for the new power plant project. The last date for tender submission is April 1.
This time, the tenders will only be considered from internationally reputed firms or consortium.
The eligible firms must have minimum Engineering, Procurement and Construction experiences of at least two combined cycle power plants, each having minimum 300MW capacity regarding engineering, supply, erection, installation, testing and commissioning on turnkey basis over the last 15 years.
Those power plants should be in continuous commercial operation for minimum two years.
The eligible company has to provide $3m in the form of an irrevocable and unconditional bank guarantee issued by any scheduled bank of Bangladesh or by a foreign bank duly endorsed by a scheduled bank in Bangladesh payable in favor of the secretary as tender security of PDB.
The government had signed agreements with the Summit Power under the Independent Power Producer guideline in May 2011 to install three power plants - the gas-fired Bibiyana 1 and the 341MW Bibiyana 2 in Habiganj, and the 337MW dual-fuel Megnaghat in Narayanganj with a combined production capacity of 1019MW.
Meanwhile, the Summit Group has claimed $45m in compensation from the government and asked it to return $3m the company deposited as security as PDB it letter for cancelling the agreement of 341MW Bibiyana 1 power plant.
The compensation issue is to be settled by the High Court.
The simple cycle of the plant was scheduled to start in August last year while the combined cycle production next August.
However, the local power company could neither collect any funds nor start the groundwork at Bibiyana 1, officials said.
Meanwhile, work at Bibiyana 2 is still at primary stages and so far only earth filling on the project site has been completed.
Though Meghnaghat was expected to go into production this month, almost six months behind schedule, it would burn furnace oil instead of natural gas, which would significantly increase the production cost, Summit officials said.
However, the PDB signed a deal with Marubeni Corporation of Japan last June and Hyundai Engineering & Construction Co of South Korea to build a 399MW power plant at Bibiyana 3 and its full operation would commence in September, 2015.
The funds for the Bibiyana 3 power plant will come through foreign currency loan.
On June 4 last year, the government approved the construction of 399MW Bibiyana 3 combined cycle power plant project.