Space For Rent

Space For Rent
Tuesday, August 4, 2015, Shraban 20, 1422 BS, Shawal 18, 1436 Hijr

Cabinet purchase body to consider unsolicited offer for 400 MW dual-fuel plant
Observer Online Desk
Published :Tuesday, 4 August, 2015,  Time : 10:54 PM  View Count : 3
The Cabinet Purchase Committee is set to consider a Singaporean company’s unsolicited proposal to set up a 400 MW dual-fuel combined cycle power plant as an independent power producer (IPP) project, under a joint venture with the North-West Power Generation Company Ltd (NWPGCL).

The project would be implemented on the same site in Sirajganj where the government terminated a letter of intent (LoI) issued to an Indian company, Lanco, that failed to provide the necessary performance security deposit (PSD).

As per the proposal, Singaporean firm Sembcorp Utilities Pte Ltd will have 71 percent shareholding in the joint venture, while state-owned NWPGCL will hold the remaining 29 percent.

The proposal has been moved by the Power Division under the Speedy Power and Energy Supply (Special Provision) Act 2010 for approval.

Official Power Division documents obtained by UNB show that Sembcorp offered to implement the project with the same tariff, and under the same terms and conditions agreed with Lanco.

As offered, the tariff would be Tk 3.2 per kilowatt hour for gas-fired operation and Tk 13.6 per kilowatt hour for diesel-fired
(HSD) operation.

The state-owned Power Development Board (PDB) would purchase the electricity for the first 22 years.

The government would have to pay Tk 21,507 crore over 22 years to purchase electricity from the plant when it runs by gas considering minimum 84.6 percent plant factor.

In case of HSD operation, the government would have to pay Tk 34,835 crore considering minimum 40 percent plant factor over the 22-year period.

After scrutinising the offer, the PDB board observed that once the proposal is approved by the government, it will require annually paying about Tk 2,757 crore as subsidy for purchase of electricity from the plant when it is running on diesel (HSD), meaning the total subsidy amount over 22 years would be Tk 60,654 crore.

Otherwise to offset the subsidy, the government would have to raise the power tariff for consumers, said the PDB board, observing that the Singaporean company has offered a higher heat rate for gas-fired operation although it assured use of efficient equipment for diesel-fired operation.

Sembcorp are offering to implement the simple cycle plant within 24 months and combined cycle plant within 30 months from the effective date of contract. The project’s debt-to-equity ratio was offered at more-or-less 3:1.


Editor : Iqbal Sobhan Chowdhury
Published by the Editor on behalf of the Observer Ltd. from Globe Printers, 24/A, New Eskaton Road, Ramna, Dhaka. Editorial, News and Commercial Offices : Aziz Bhaban (2nd floor), 93, Motijheel C/A, Dhaka-1000. Phone :9586651-58. Fax: 9586659-60, Advertisemnet: 9513663, E-mail: [email protected], [email protected], [email protected].