Uncertainty looms large over the project implementation of the 341MW combined cycle power plant at Bibiyana in Habiganj as the Power Division and project sponsor Summit Power have taken opposite stands on the period of implementation, said officials.
They said that the uncertainty was ‘threatening’ the government’s plan for reducing dependence on expensive fuel-oil-fired power plants in the immediate future.
The proposed power plant, named Bibiyana-1, will run on gas and provide the Power Development Board with very low-price electricity at 3.322 US cents, which is around Tk 2.70 a kilowatt-hour (unit).
Summit argues that they will get 24 months after the registration of the land or the land lease agreement and the government has not yet signed the land lease agreement.
But both the Power Division and the Power Development Board say that there is no relation between the land lease agreement the implementation period. That means Summit will have to install the power plant by June 2013 as the PDB signed a power purchase agreement with it in May 2011.
A Power Division official said that Summit has not yet decided whether it will implement the project.
‘Once the company said that that it would abandon the project if the government gets a better offer but then again it expressed its commitment to implement the project,’ he said.
‘How will the government give the project to another party if Summit does not withdraw itself formally from the project?’ he questioned.
‘The government asked them to sign the land lease
agreement last Monday. But they did not respond,’ he said.
It has been asked again to sign the agreement today, he said.
Summit wants more time for signing the agreement.
Power Cell’s director general Mahboob Sarwar-E-Kainat told New Age, ‘According to the contract, Summit will have to commission the simple cycle of the plant in 24 months and the combined cycle in 36 months after signing the power purchase/sales agreement.’
He said that the land lease agreement was related to the financial closure by which a firm assures the government that it has the financial capability to implement the project.
‘Summit will get day-to-day extension for financial closure until we sign the land lease agreement with the firm. But it will not have any impact on the project implementation period,’ he said.
Summit Group’s chairman Muhammed Aziz Khan, however, asked how they would implement the project if they did not have the land registered in their name.
He complained that the government had not signed the land lease agreement in 15 months.
When asked why the government was delaying the signing of the land lease agreement, Power Cell’s director general said that it was due to some ‘procedural’ problems in land registration.
‘But we have handed over the land to them and there should not be any problem in project implementation,’ he said.
The PDB in May 2011 signed an agreement with Summit Power for buying electricity from Bibiyana-1 for 22 years.
The PDB at that time also signed two other power purchase agreements with Summit to buy electricity from another 341MW power plant to be installed at Bibiyana and a 335MW one to be installed at Meghnaghat in Narsingdi.
But, Summit is yet to confirm that it can install the power plants, Bibiyana-1 and 2, although the deadline expired in February this year.
The government has so far failed to bring power into the national grid from any low-cost long-term power station set up either in the public or the private sector.