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HEADLINE
 
New high-rise bldgs to have own power generation units
Small power plant project to go thruí yet another restructuring
10/27/2005
 

          The government will restructure its Small Power Plant (SPP) project to bring transparency in the selection process of the sponsors process, reports UNB.
According to an informed source, the Power Ministry has already made a move following World Bank (WB) "pressure" for doing it, all over again, to ensure transparency in the selection process.
Official sources said, some major changes would be made, while restructuring the SPP project, in areas of selection process of the selection process so that the genuine entrepreneurs can win the contract.
State Minister for Power Iqbal Hassan Mahmood disclosed Wednesday about his ministry's latest move. This move is practically a step backward from the government's earlier crash scheme for addressing the much-vexed power problem.
In the rewritten procedure, he said the probable rate of electricity tariffs has to be mentioned in the offer of sponsor.
"Tariffs will be one of the main criteria to select a sponsor for the project for the sake of fair competition," he said. The government will accept the lowest tariff offer, he added.
Earlier, on being instructed by the Prime Minister's Office, the Power Ministry had invited private- sector entrepreneurs to submit offers under a format-Expression of Interest (EoI)-to set up 45 small power plants each being of 10 megawatt (mw) 50 mw capacity, across the country.
About 320 private firms submitted their respective offers through the EoI to set up the proposed plants.
As planned, the state-owned entities like the Power Development Board (PDB), the Rural Electrification Board (REB) and the Dhaka Electric Supply Company (DESCO) will purchase electricity from the plants at a negotiated price.
Under the EoI process, it was not made mandatory to mention the tariff of electricity. Rather, the selectors were given discretionary powers to qualify or disqualify a sponsor.
The Power Ministry, however, contended that it had avoided the conventional tendering process for implementing the project at the earliest to get a remedy for the nagging outages.
The country experiences now between 800 and 1000 mw of shortage in power generation against a demand for 4,400mw.
Genuine entrepreneurs were highly critical of the government's EoI process, saying that it does not go by any of the existing rules and policies.
When the government was going ahead with the project, the WB intervened in the process with a strong objection it.
The donor agency took a stand that it would review its promised financial support to the country's power sector if the government proceeded in the way it was moving ahead.
Operations Advisor of the World Bank Bangladesh Mission David Hughart said the funding agency considers that the government should ensure fairness and transparency in each and every public procurement process.
"That's why we have suggested the restructuring the SPP project to ensure transparency in the selection process of sponsor," he told news agency.
Following the objection, the government recently put off the project "until further orders".
Sources said the project would now be 'resuscitated' in a recast form after completion of the redesigning of the disputed selection process.
Our Staff Reporter adds: The country's new or under-construction high-rise buildings must have captive power generation facility before seeking electricity connection from the national grid.
"The new high-rise buildings should have the captive power generation capacity to run at least six hours by the electricity of their own during the peak hours under the prevailing power crisis situation," State Minister of Power Division Iqbal Hasan Mahmood said Wednesday.
Mahmood said the Real Estate and Housing Association of Bangladesh (REHAB) members will also be asked to take necessary steps as they are the builders of most such high-rise structures in the country.
He was speaking at the Advisory Council's meeting on power at the Secretariat where the top officials of all the state-owned electricity entities including the Power Development Board (PDB), Dhaka Electricity Supply Authority (DESA) and Dhaka Electricity Supply Company (DESCO) took part.
During the meeting the state minister also asked the industrialists, especially those ready-made garment (RMG) factory owners, for using electricity from their own captive power generators during the peak hours.
"If the private sector does not come up with such mechanism during the peak hours the government will have to invest US$ 3.5 billion more to meet the peak hour electricity demand," the state minister of the Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) said.
He also proposed for setting up an Urban Electrification Board (UEB) -- similar to the existing Rural Electrification Board (REB) -- to ease the nagging electricity crisis in urban areas.
"A proposal is also underway to provide express electricity line for the industrial sector to ensure uninterrupted production," he said.
Mahmood also regretted that the power plants were not getting required gas for generating power.
PDB Chairman ANH Akhter Hossain said the country's electricity demand increased by 40 per cent over that of the level in 2001.
He said Wednesday's electricity generation was the highest at 3,722 megawatt (MW) so far against the demand of 4100 MW.
"But this capacity of generation will not last long as many of our power plants are old," the PDB chairman added.
He, however, hoped that the existing power crisis might ease when the Barapukuria 250 MW coal-fired power plant and Shambhhuganj 70 MW power plant would be commissioned by February 2006.

 

 
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