They said the ministry has sent a project summary full of misleading and self-contradictory statements to be tabled at a meeting of the Cabinet Committee on Purchase today. The ministry claims the bid of Chinese company Harbin Power complies with all government rules and regulations and, therefore, the committee should approve it immediately as a national priority project.

But, responding to a formal complaint, a government review panel a couple of months ago adjudged the Harbin offer as disqualified and Power Development Board's (PDB's) handling of the tender process as grossly flawed.

The ministry, on the other hand, argues that the review panel's dealing with the complaint was flawed and, so, the cabinet committee should ignore its conclusions 'in public interest'.

It says the Harbin bid is the 'lowest' and the nation can have 100 megawatt power within the next 18 months from the Chandpur plant if the committee approves it.

But, sources said the Harbin offer looks cheaper by $11 million from that of its nearest competitor, another Chinese company CMEC, because it has not quoted the full price of spare parts for the plant. They reckon Harbin will impose an additional price of $7 to 8 million on the PDB once the project is cleared.

"Besides, Harbin's first power plant in Bangladesh, the 80 MW Tongi plant, is a fine demonstration of the company's technical handicaps. Since its launch in May to this day, the plant has kept on tripping time and again due to technical glitches," an official pointed out.

In mid-October, a three-member PPR review panel of the Central Procurement Technical Unit (CPTU) of Implementation, Monitoring and Evaluation Division (IMED) declared Harbin's $41 million offer for the plant informal and void, as it lacked any technical offer.

As per Regulation 59 of the PPR, the decision of such a review panel is final. Nonetheless, the ministry and the project implementation authorities, the PDB, ignored the panel's judgement and went ahead with the project.

But, as there has been much pressure from the World Bank for upholding the decision of the review panel, they resorted to gathering legal opinions in favour of the Harbin bid and the tender process of the PDB.

The PDB obtained a lawyer's opinion that the PPR review panel cannot take the final decision on the tender. The power ministry also got hold of a similar opinion from the law ministry.

The power ministry also sought a favourable opinion from the IMED, but the latter upheld the review findings.

MISLEADING PROJECT SUMMARY

The project summary to be placed before the cabinet committee today itself reveals many self-contradictions by the ministry and the PDB.

It says the PDB floated a two-stage international tender for the Chandpur plant on July 26, 2004, in which five companies were found technically qualified. In the follow-up process, two of the bidders were dropped.

Between April and May 2005, the PDB's Technical Evaluation Committee (TEC) on the tender discussed with the bidders and the PDB then decided that the second stage of the bidding will need a complete set of technical and price proposals. Accordingly, the three short-listed bidders -- Bhel of India, Harbin and the CMEC -- were asked to submit both technical and financial offers by June 28.

However, the ministry's brief to the cabinet body has conveniently forgot here to mention that Harbin's bid did not include any technical offer. Instead, it reported that the TEC on July 7 decided to ask Harbin to "submit detail of specification including scope of supply, service and work and acceptance of arithmetic correction as per tender document".

The PDB on July 9, after the bidding had been closed, sought a 'clarification' from Harbin, which practically was seeking the whole technical offer. By August, the TEC marked Harbin's offer as the lowest one.

Meanwhile, the CMEC lodged complaints with the PDB, the ministry, the Prime Minister's Office, and finally, as per the provisions of the PPR, with the IMED.

The government review panel found the actions of the PDB as violations of tender rules and regulations. It said the PDB's tender evaluation reports were based on wrong interpretations of rules, deliberately biased and therefore unacceptable.

The power ministry also contradicts itself when it says in the project summary, "in a two stage tendering process" there is no need to ask for a technical proposal at the second level and the Review Panel could not properly understand this point."

"Practically, the PDB asked for a technical proposal as an additional precaution. This is not legally mandatory," it said. Yet, in the earlier part of the summary, the ministry said 11 days after the end of bid submission, the PDB felt the urgency to have the technical offer from Harbin.

The ministry made a wrong interpretation of the Regulation 39 of the PPR by saying it gives no scope for asking for a revised technical proposal and so the PDB asked the Harbin only to submit the "priced best and final" tender. The review panel marked this act as a modification of tender "after" bid-closure, a serious violation of the PPR.

The business lobby for the Harbin bid has been trying very hard to have the flawed offer approved by the cabinet's purchase committee. It also lobbied the Chinese government to silence the CMEC in Bangladesh.