Four months ago, Power Development Board (PDB) had to cancel a tender for a 300 megawatt dual-fuel power project in Ghorashal due to opposition from Communications Minister Syed Abul Hossain at cabinet level. Back then, the Hossain family-owned company Sahco was representing a Chinese company that had failed to be the lowest bidder in that tender.
The PDB then floated a fresh tender for the project. This time, Sahco represented a Chinese consortium-- CNTIC and CMC. When the PDB opened the financial offer for the power project, another Chinese company -- Shanghai Electric-- turned out to be the lowest bidder, and not CNTIC-CMC.
But due to alleged foul play by the PDB tender committee, the consortium has now become the lowest bidder and Shanghai Electric the second lowest. Now, the PDB is seeking the power ministry's clearance for awarding the job to the consortium, well placed sources in the PDB said.
Other sources said as per the bidding criteria, instead of selecting CNTIC-CMC's bid-- the PDB should have disqualified it because the consortium's bid offer lacked vital information about its proposed power plant's net heat rate. A plant's heat rate directly affects the cost of power, they mentioned.
Apparently to save CNTIC-CMC's bid and allow it to modify its tender document, the PDB tender body during evaluation of bids unduly sought the consortium's clarification, asking it in a January 9 letter to provide the net heat rate.
This gave the consortium an opportunity to modify its bid in a way that its price offer would become cheaper than that of the lowest bidder Shanghai Electric. The consortium on January 16 gave a net heat rate and grossly changed two vital technical specifications stating that its previous specification had typing errors.
Accordingly, the consortium's bid offer became lower than that of Shanghai Electric, which had submitted a flawless offer.
Before the tender evaluation began, the read out price of Shanghai Electric for this power project totalled $ 191.4 million and CNTIC-CMC's $192.9 million.
This power plant will operate using both natural gas and furnace oil.
During the initial evaluation process, it was found that Shanghai Electric's per kilowatt gas-fired power generation cost stands at $656 and furnace oil-fired cost at $650. The CNTIC-CMC's gas- fired cost comes to $665 and $653 respectively.
After the consortium modified its bid documents, its per kilowatt gas-fired power cost came down to $657 and furnace oil-based cost to $644.
"The consortium was allowed to reduce a total cost of Tk 20 crore, and this helped it to become the lowest bidder by a narrow margin," said a PDB source.
After the evaluation process, the consortium's total bid offer stood at $192.8 million while Shanghai Electric's total increased to $193 million.
It is alleged that the tender evaluation has been tampered with under the influence of the communications minister; but the minister brushes aside the allegation saying, "I have no links with Sahco now. I am not involved."
Syed Abul Hossain said if a company (represented by Sahco) gets a contract as the lowest responsive bidder, what was the problem? It was pointed out to him that the consortium was not really the lowest responsive bidder and that it was given an unfair chance to modify the bid to become the number one. He commented, "You are free to write whatever you want. It is the PDB that should clarify this matter."
A top PDB official, requesting not to be named, said, "It was unfair for the tender evaluation body to ask for information from any company during the evaluation process because it affects the power tariff. The evaluation body should have sought permission from the board (PDB), which it did not."
But it is not clear if the PDB will now review its recommendation to award the job to the consortium at this stage.
The tender for Ghorashal project is one of the poor examples of power projects under the present government, which has so far awarded dozens of power generation contracts for a total of nearly 3,000 MW.
This is actually the third tendering for the same project. The first one, floated in 2009, had to be cancelled due to lack of participation by bidders. The second tender was cancelled due to resistance from Syed Abul Hossain, who argued the PDB picked a bidder that had submitted fabricated documents.
Back then, the communications minister claimed to The Daily Star that he had resigned from Sahco when he became a minister and that he was not influencing any bid. "I am no longer in that company. Can't this company do business just because I was in it before? All I asked of Sahco is that it should not participate in any job with the communications ministry," he said.
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