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Dhaka Tribune

Bidders anxious over green opposition

Update : 24 Mar 2015, 07:33 PM

International bidders for the construction of a controversial 1,320MW coal-fired power plant situated near the Sundarbans have called for a compensation mechanism to protect them from “unfortunate situations” arising from opposition to the plant.

Bidders raised concerns about the security of their investment in the proposed power plant and sought an extension to submit techno-commercial and financial bid proposals during a two-day pre-bid meeting that ended yesterday at Bidyut Bhaban in the capital.

The proposed plant at Rampal in Bagerhat district will be set up by the Bangladesh-India Friendship Power Company Limited (BIFPCL).

BIFPCL is a joint venture between Bangladesh’s Power Development Board and India’s National Thermal Power Corporation, who have 30% equity on an equal share basis. The remaining 70% will be mobilised as Export Credit Agency loans.

Representatives of companies from China, Japan, India, Spain and South Korea sought explanations and clarifications of the financial aspects of the project and raised questions about the security of their investment if they engage as Engineering, Procurement and Construction (EPC) contractors for the project.

The pre-bid meeting is considered a major step in the implementation of the project.

Harbin Electric International Company Limited and Dongfang Electric Corporation Limited of China, Japan’s Marubeni Corporation, South Korea’s Hyundai Electric Company, Larsen & Toubro Limited of India and Bharat Heavy Electricals Limited of India attended the meeting.

In response to their queries, representatives of Fichtner GmbH & Co. KG, the consultant of the project appointed by BIFPCL, said the Bangladesh government would issue sovereign guarantees to secure investments made by foreign investors.

Only three companies have so far bought tender documents to build the power plant, more than a month after the tender period opened. Bidders remain anxious of a movement against the plant which opposes it on environmental grounds. 

On March 22, the representatives of the foreign firms made a mandatory visit to the project site.

Companies asked who would carry out soil tests at the project site since it had recently been filled with earth.

The government’s plan to build the large power project near the Sundarbans has already generated much debate and controversy on the grounds that it will adversely impact the world’s largest mangrove forest.

But the government claims the power plant will not affect the Sunderbans, a UNESCO World Heritage Site.

“We are glad that many international companies participated in the pre-bid meeting. The company officials focused on techno-commercial and financial aspects of the proposed power project during the meeting,” Power Division Secretary Monwar Islam, who is the chairman of BIFPCL, told the Dhaka Tribune.

But one bidder said during the pre-bid meeting: “If an unfortunate situation arises while the power plant is being set up, we must get compensation.”

A BIFPCL official said no decision had yet been taken about the bidder’s concern about compensation.   

On February 12, BIFPCL invited bids to set up the 2 x 660MW Maitree Super Coal-fired Thermal Power Project in Rampal, Bagerhat on an EPC contract basis. Bids are due by May 18.

Bangladesh expects to get 660MW of electricity from the plant’s first unit by 2018. Another 660MW from the second unit will be available by 2020, officials said.

Environmentalists, left-wing political organisations and the National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports, a lobby group, object to the power plant’s location so close to the Sundarbans. 

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