The lowest bidder for the project that had been re-tendered four times was Japanese company Sumitomo with an offer of $83 million.

Sumitomo's nearest competitor Canadian company SLI offered $89.5 million while the PDB disqualified three other bidders for failing to meet the technical criterion.

But soon after the PDB picked Sumitomo, it was found the company's proposal did not cover all the tender requirements including performance guarantee and supply of spare parts for the plant.

The PDB asked the company to clarify its position and the company added these options asking for an additional $3.5 million as cost of spare parts and left out some matters for decision through detailed discussions. Later, Sumitomo and the PDB agreed on increasing the tender amount to $85.14 million by revising the deal.

Other bidders saw in this a gross violation of tender process. They said the PDB had re-tendered this project thrice on various pretexts but now set an example of gross violation of rules by allowing changes in a bidder's offer after the bid has been opened.

The PDB however argues the re-tendering was needed because of lack of competition.

"Nowadays we don't get small scale plant (below 100 megawatt) developers because bigger plants have become cheap and cost effective. But we have this project site ready and the first phase 95 megawatt Fenchuganj plant already running. That is why we want to build a second unit of similar size amid limited interest of the bidders," said a top PDB official requesting not to be named.

"In the first three bids, the competition was poor but we wanted to have a good deal. And now we have become impatient about getting the deal finalised. So we have gone for Sumitomo's offer."

He went on, "But we really did not violate the tender process. The additional cost was optionally there in the original offer of $83 million. This will be required if we want to add a gas supply booster to the plant. We may not ultimately need the booster."

But another source points out the tender covered the booster and that Sumitomo's original offer should have taken that into account.

The power division of the energy ministry is now processing clearance of the Sumitomo offer. It will then be sent to the cabinet purchase committee for final clearance.

Sources said a lobby belonging to the 'alternative powerhouse' of the government has been trying since September 2002 to make the PDB sign the deal with a certain company.