Sources quoting German donor KfW officials said a team of auditors in Germany has already started looking into files of the RPCL that is allegedly plagued with corruption, and it was scheduled to arrive in Dhaka on November 29 on a 11-day probe mission. But the auditors shelved the visit temporarily at the last moment.

Germany committed two grants worth over Euro 80 million for the RPCL's 450 MW Savar project and the third phase of the Mymensingh 70 MW project. It threatened to cancel the grants unless the projects are audited.

A source in the RPCL says, "Since Germany started talking about the audit from February, the RPCL has modified a lot of documents. But many documents showing irregularities are already available in offices outside the RPCL."

This unique auditing has started in line with an understanding between the governments of Germany and Bangladesh. But while the Economic Relations Division (ERD) okayed the auditing, the RPCL and its parent organisation the Rural Electrification Board (REB) have been vehemently opposing it and even went on saying that such an auditing is "against the interest of the nation."

The German government last month sought cooperation of Bangladesh government so that the auditors of Deloitte & Touche GmbH of Germany could have access to the RPCL's documents during their visit that was due to start on November 29.

The RPCL in a last ditch effort announced last month it did not want any German funds. In a letter to the ERD, it further said the German auditors could only see documents relating to German funding for Mymensingh phase-3 power plant. It will not allow review of the Savar project.

Earlier the RPCL unilaterally went ahead with setting up the Savar 280 MW power plant with primary funds of Tk 300 crore raised from different rural power cooperatives, better known as Palli Biddyut Samity (PBS).

On October 7, the RPCL secretly signed an agreement with Swiss company Alsthom that turned up as a lone bidder for the Savar project tender floated late last year. Alsthom sought Euro136 million, which is almost the same spent for the 450 MW Meghnaghat power plant.

The other bidder in that tender --German Siemens--withdrew from the bid when The Daily Star back in January exposed corruption attempts of the RPCL in connivance with its donors, and the German government reacted.

The RPCL had earlier appointed Lahmeyer as project consultant without any tender. Lahmeyer was earlier given a 15-year operation and maintenance contract for the RPCL's Mymensingh power projects -- also without any tender -- at a cost at least five times the Power Development Board (PDB) does a similar job.

A top official of the Power Ministry said the ministry is not aware of the signing of any contract for the Savar project.

"The RPCL is a company that has freedom to go for its self-financed project without informing the ministry. The REB chairman represents the government in the RPCL board. If there is any irregularity there, it is his job to inform the ministry," he points out.

RPCL sources said the local agent of Lahmeyer--a powerful businessman-- who has strong influence in the RPCL and even attends its Board meeting, now wants to get the project implemented with PBS funds and commercial loans. This businessman also acted as a local agent of Alsthom in the past.

The overpriced contract will benefit a handful of lobbyists and businesspersons and put extra financial burden on rural consumers, industry sources observe.

A highly placed source in the ERD told The Daily Star that the RPCL has been unusually resisting any move to show its books to any auditor because it might open up a Pandora's box of corruption. "A very influential quarter is also involved in the corruption," he added.

Alongside Germany, the Asian Development Bank (ADB) that virtually created the REB had raised objection about the way the Savar project was proceeding, especially unsolicited hiring of the project's consultant Lahmeyer. Later, the World Bank also seconded Germany's concerns.

Meanwhile, the RPCL arbitrarily fired seven of its senior officials including Managing Director (MD) Abdus Sabur, who has reportedly been trying to resist the corruption.

RPCL's acting MD Ismat Alam refused to disclose whether his company signed any deal with Alsthom. "I cannot tell you that now," he said.

He made a similar reply on the question of RPCL resisting the German auditors' visit. He however said, "The auditors have not come to Dhaka and there is no auditing now."

The RPCL's Savar project tender rules bar participation of any EPC contractors although it is an Engineering and Procurement Contract (EPC).

The RPC was originally formed in 1996 as a private-public enterprise with the REB owning 51 percent of its share and select Rural Power Cooperatives the rest. There are allegations of corruption against all its existing Mymensingh power plants.