3 more power plant contracts okayed
Monday, October 25, 2010
Front Page3 more power plant contracts okayed
Gas-based plants to supply 600MW within 3 years
The cabinet purchase committee yesterday approved awarding contracts for three gas-based power plants that would produce 600 megawatt electricity.
Of these, local Summit Industrial and Mercantile Corporation Ltd and its American partner GE have been awarded a private power contract to set up a 450 MW combined cycle power plant in Bibiyana at a very competitive price of US 3.32 cents per kilowatt-hour over a period of 22 years.
Two remaining plants would be set up by Aggreko as rental power units. The British company will set up an 80 MW plant in Brahmanbaria and a 70 MW one in Ashuganj. Aggreko will charge Tk 4.8 per kilowatt-hour during its three-year contract period. Afterwards, the company will uninstall its units.
Summit won the Bibiyana bid by offering a price that is much lower than that offered in the first tender for the same project which was cancelled in 2008. That bid drew a lone offer of US 4.53 cents per kilowatt-hour.
Once Summit-GE signs the final agreement for the project with the Power Cell under the power ministry, it will have to launch the simple cycle part of the plant within 24 months and combined cycle part within 36 months.
The simple cycle part is built using gas turbines, while the combined cycle uses heat generated by the simple cycle unit to produce extra power.
The Bibiyana power plant project will be implemented on a build, own and operate (BOO) basis. The World Bank (WB)-financed power project will cost over $300 million. The plant will use natural gas from US oil giant Chevron-operated Bibiyana gas field to generate electricity.
"It is a matter of national pride," said Summit chief Muhammad Aziz Khan. "We are more than pleased that a Bangladeshi company as a lead member will be able to implement this project. Once again we will prove that we can, like our cricket team has shown that they can."
Aziz Khan noted that in addition to taking finances from the WB, Summit-GE hopes to get finances from other commercial lenders.
Earlier this month, the Power Development Board (PDB) initiated a contract with Aggreko for two rental power plants as a fail-safe measure to ensure maximum power generation in next irrigation period in February.
The deal was made through unsolicited negotiations. Aggreko was picked for the deal for its solid reputation in the country to deliver a power plant in time. It had previously installed a 200 MW rental power unit under a contract ahead of time, a feat no other rental power companies could have demonstrated ever.
Aggreko has to bring its first 70 MW power generation within 75 days, and the rest within 120 days of signing the contract.
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