[ALOCHONA] World Bank backs 'ineligible' firm

World Bank backs 'ineligible' firm

The World Bank has recommended that a foreign firm build Siddhirganj power plant breaching tender conditions for a project worth no less than $ 300 million to cut peak-hour electricity deficits.

According to a bdnews24.com investigation, the tender valuation committee and a fuel expert of the World Bank have thrown their weight behind a joint venture of Isolux Ingenieria SA of Spain and Samsung C&T Corporation of South Korea to get the project, financed by the World Bank and the government of Bangladesh.

Sahco International Limited, of which communications minister Syed Abul Hossain is a former managing director, is the representative of the joint venture in Bangladesh. Ruling Awami League MP Mostafa Faruque Mohammed is now the managing director of the company. The communication minister's wife and two daughters are directors of the firm.

Even as the joint venture of Isolux-Samsung has had no previous experience in such construction, which is a must to get the job in line with the conditions mentioned in tender, senior fuel expert of WB's South Asia Sustainable Development Unit Mohammad Iqbal has recommended giving the work to the firm. Iqbal is the task team manager of the project to construct the Siddhirganj plant.

The tender evaluation committee says it was working in line with the WB recommendations. The Electricity Generation Company of Bangladesh Limited (EGCB) called the tender for the construction of the 450-megawatt power plant.

On Dec 23 last year, Cobra SA and Isolux-Samsung submitted tenders with offers to build the facility at $300 million and $342 million respectively. The two companies, however, offered to supply equipment from the same company.

But, the tender valuation committee had initially thrown out the lowest bid from Cobra on the ground that it had provided 'unnecessary' information in the documents and Isolux-Samsung had not built any such plant before. Then, on Jan 13, it sought views of the bank.

Several letters and meetings later, the bank wrote to the power secretary on Mar 31 asking him to explain what 'previous experience meant and give necessary orders.

And, when the assessment committee wrote to the highest bidder, Isolux-Samsung, for an explanation of their offer, Cobra, the lowest bidder, said they also be given opportunity to explain their offer.

But in a June 24 letter to the power secretary the WB took a stance against allowing the lowest bidder an opportunity and recommended considering the highest bidder's offer. The evaluation committee got back to WB with the opinion that the highest bidder's offer might be considered if the highest bidder having no previous experience was ignored.

On Jul 5, Cobra filed a written compliant to finance minister A M A Muhith alleging irregularities in the appraisal, and sought his intervention for an impartial evaluation. The finance minister asked the power secretary to make a report on the developments but he has yet to submit one. Instead, fuel expert Iqbal in another letter on Aug 10 informed the tender evaluation committee that their report had been accepted and that the WB had no reservations about the job being given to Isolux-Samsung.

Pressed for comment on the allegations of irregularities, EGCB director (technical) Shanti Ram Roy, who heads the evaluation committee, told bdnews24.com: Everything is being done as per the committee's decision." Asked why the highest bidder was being picked for the job even though both the firms were 'disqualified', he said, "We are working following recommendation from the financier (World Bank)."

The EGCB director declined comment when asked whether anyone was influencing the decision to contract the highest bidder. EGCB managing director Mohammad Mostafa Kamal said, "The matter of implementing the project is under process, it's not been finalised yet." He said they would sit with Isolux-Samsung on Sept 7 to close the deal on the appointment of contractor.

The managing director of the Sahco International Limited, the Bangladeshi associates of Isolux-Samsung, told bdnews24.com: "I don't know anything about this matter." Power secretary Abul Kalam Azad said, "Nothing that can cause irregularity will be done." He also said they would submit a report on Cobra's complaint as per the finance minister's instruction.

WB's South Asia Sustainable Development Unit's fuel expert Mohammad Iqbal was not available for comment. World Bank's country director Ellen Goldstein told bdnews24.com the tender evaluation committee has told the World Bank Cobra's proposal was not considered despite their being the lowest bidder for failing to meet the tender conditions. The bank gave its no-objection certificate for Isolux's proposal since it meets international standards for procurement.

"The World Bank will have no objection if the Bangladesh government enters into a contract in line with the recommendations of EGCB's evaluation committee," he added. On Sept 8 2009, the Executive Committee of the National Economic Council (ECNEC) cleared the project to build the state-of-the-art 300-MW gas turbine peaking power plant at Siddhirganj at an estimated cost of Tk 27.743 billion. Later the government decided to raise the capacity of the plant to 450 MW. The estimated cost was doubled, too.

According to the amended proposal, a total of Tk 41.65 billion would be needed to implement the project. The WB would lend Tk 30.4119 billion while the government would fund the remaining.

http://www.bdnews24.com/details.php?cid=2&id=204514&hb=top

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