Cabinet body okays extension of deals with 4 rental power plants

The Cabinet Committee on Public Purchase (CCPP) on Wednesday approved 5 proposals of the Power Division-four for extension of contracts with 4 gas-based rental power plants and one for setting up a new independent power producer (IPP) plant.

Another 7 proposals of different departments under different ministries also received approval of the CCPA.

Besides, the Cabinet Committee on Economic Affairs (CCEA) gave nod to another proposal of the Power Division for signing an unsolicited contract for operation and maintenance of a public sector power plant.

Finance Minister AHM Mustafa Kamal presided over the consecutive meetings of the two cabinet bodies where their respective members were present.

The four rental power plants which got the cabinet body approval are 50 MW Kumargaon power plant, 50 MW Fenchuganj plant, 20 MW power plant in Bogura and 53 MW Ashuganj power plant.

About the approvals, the finance minister said that state-owned Bangladesh Power Development Board (BPDB) will purchase electricity from them on “No Power, No Payment” basis for which the government will have no obligation to buy power from the plants.

Of these, the contract with Energy Prima Ltd.’s 50 MW plant in Kumargaon will get extension for another one year till December 31 in 2022 at a cost of Tk 86.52 crore while the same company’s contract for 50 MW power plant in Fenchuganj will be extended for 3 years at a cost of Tk 278.64 crore, contract for 20 MW Bogura plant will be extended for 3 years at a cost of Tk 106.92 crore and United Energy Ltd’s contract for 53 MW Fenchuganj plant will get extension for another 5 years at a cost of Tk 451.20 crore.

The contracts with these companies were extended several times in the past, said additional secretary to the Cabinet Division Shamsul Arefin adding that this time the contracts will be extended at a lower tariff than that of previous contracts.

For instance, he said Kumargaon power plant’s tariff was set at US 2.4691 Cents, equivalent to Tk 1.97 in the new contract while it was US 3.4737 Cents in the previous contract.

The CCPA approved a proposal of the Consortium of (1) Confidence Power Holdings Ltd, (2) GE Capital US Holding Inc, (3) Confidence Power Ltd and (4) Electropac Industries Ltd for setting up a 660 MW base-load power plant as independent power producer (IPP) at Mirsarai of Chattagram.

The BPDB will purchase electricity from it for 22 years tenure at levelised tariff of US 3.679 Cents, equivalent to Tk 2.943 per kilowatt hour (each unit) if the plant runs through gas.

But if the plant runs through imported re-gasified liquefied natural gas (RLNG), each unit’s levelised tariff will be US 6.69 Cents, equivalent to Tk 5.4368.

The BPDB will have to pay Tk 69,152.16 crore over the 22 years of contract period for purchase of electricity from the plant.

The committee approved a proposal of the Food Ministry to import 50,000 metric tons of wheat from Bagadiya Brothers Pvt. Ltd., India, at a cost of Tk 173.36 crore.

Directorate General of Family Planning’s proposal to procure 29.76 million oral pills from three drug companies at Tk 148 crore received the approval.

Meanwhile, the Cabinet Committee on Economic Affairs in principle approved a proposal of the BPDB to procure the operation and maintenance service of the Original Equipment Manufacturer (OEM) for 4th unit of the Ghorasal Power Plant through direct procurement method.