After cancelling a major power plant deal with an Indian company, the government is now set to award the 367MW dual fuel power project to Singapore-based Sembcorp under the Speedy Supply of Power and Energy (special provision) Act.
On September 1, the Power Cell under the Power Division cancelled a deal with Haryana-based Lanco Infratech Ltd because the Indian company failed to deposit the security money.
Power Cell was supervising the project for building the power plant in Sirajganj.
“We cancelled the letter of intent (LOI) awarded to Lanco as it failed to submit performance security deposit (PSD) of $13.23m by August for building the power plant,” said CFK Musaddeq Ahmed, a director of Power Cell.
Under existing rules, when the government issues an LOI to a company for any contract, the company must pay the PSD within a stipulated time. In case the PSD payment deadline cannot be met and the deal is cancelled, the company must still pay the money to the government as a form of compensation.
Sources said the Indian company – Lanco – could not make the security deposit in time because of a financial crisis. Lanco also had to shut down some of its major power plants at home and abroad because of the reported crunch.
In the meantime, Singapore-based Sembcorp sent a proposal to the Power Ministry for building a dual fuel power plant at the same location in Sirajganj.
The proposal letter, signed by Sembcorp’s Executive Vice-President Tan Cheng Guan, was recently sent to State Minister for Power Nasrul Hamid.
After getting Sembcorp’s proposal, the Power Ministry sent a proposal to Prime Minister Sheikh Hasina, who is also the minster in-charge of Power Ministry.
Power Division sources said the premier has recently approved the proposal under the Speedy Supply of Power and Energy (Special Provisions) (Amendment) Act 2014.
A Power Division official said it would be the biggest power plant building deal with a Singapore company based on the production capacity.
Meanwhile, Singapore has also shown interest in setting up two more power plants in phases having capacity of 700MW each under joint venture.
Visiting Singaporean senior state minister for foreign and home affairs, Zulkifli Masagos, expressed the interest when he called on Bangladesh Foreign Minister Abul Hasan Mahmood Ali and State Minister Shahriar Alam at the Foreign Ministry yesterday.
On March 28 last year, India’s Lanco signed an initial agreement with Bangladesh for a power and gas purchase-sale on the proposed 367MW Sirajganj dual-fuel power plant, which was supposed to start commercial operation in mid-2015.
Lanco was also awarded another project for building a 214MW plant in Bhola; but after the contract-signing, the company has sought relocation of the plant to Sirajganj and proposed setting up a dual-fuel power plant instead.
