Deadlock over Shikalbaha 225 MW power plant project goes

Deadlock over Shikalbaha 225 MW power plant project goes

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The deadlock over the funding of Shikalbaha 225 MW Combined Cycle Dual Fuel (Gas & FO) Power Plant project is now over as the Kuwait Fund for Arab Economic Development (KFAED), one of the four major co-financiers of the project, have issued their concurrence to the government.
Following the concurrence from KFAED, the government has recently received the concurrence from another co-financier of the project Abu Dhabi Fund for Development (ADFD) on the TEC Financial Evaluation Report for the Shikalbaha 225 MW Dual Fuel (Gas & FO) Combined Cycle Power Plant project, said sources at the Finance Ministry.The Economic Relations Division (ERD) of the Finance Ministry stated in a recent letter to the ADFD that the construction work on the Shikalbaha project would start in September next.
A Finance Ministry official said that with the recent concurrence from the KFAED, there is now apparently no problem regarding the funding of this project.
The KFAED officially have conveyed their concurrence to the Power Development Board (PDB) on March 16, this year.
Earlier, on February 19, 2013, the Executive Committee of the National Economic Council (Ecnec) approved the Shikalbaha 225 MW Dual-Fuel (Gas & FO) Combined Cycle Power Plant project aimed at reducing power shortage and meeting growing demand of power in greater Chittagong region.
The Shikalbaha 225 MW project would be implemented on a PDB land near the existing Shikalbaha Power Plant.
The project would ensure uninterrupted and reliable power supply to Chittagong region. Four development partners in the Middle East — Saudi Arabia, Kuwait, the UAE and OPEC Fund — will provide around Tk 1,375 crore for the project.
Of the total project cost, the KFAED will provide $ 53 million, Saudi Fund $ 53.33 million, ADFD $ 31.04 million and the OPEC Fund $ 30 million apart from the government’s contribution of $ 82.34 million.
The government has already signed necessary agreements with these co-financiers. The Finance Ministry official said that the ADFD sent a letter to the ERD on March 3, 2014 expressing concern about the slow implementation progress of the above mentioned project alongside the South Asia Sub-Regional Economic Cooperation (SASEC) Road Connectivity Project.
In response, the ERD sent another letter to the ADFD Acting Director General Mohammed Saif Al Suwaidi clearing government’s position on the two projects. In the letter, the ERD conveyed that both the projects suffered delay due to technical problems.
In case of the Shikalbaha 225 MW Dual Fuel (Gas & FO) Combined Cycle Power Plant project, the ERD said that the KFAED initially dissented to give concurrence in favour of the Larsen and Turbo company which was recommended by the Technical Evaluation Committee (TEC) as the most responsive bidder according to the terms and conditions mentioned in the approved document.
However, KFAED later gave their concurrence being convinced by the answers provided by the implementation agency in response to their queries. The ERD also noted that the construction work of the plant will kick off in September, 2014.
In a recent review meeting on implementation status of the ongoing projects financed by KFAED, OPEC Fund, ADFD and other development partners chaired by ERD Additional Secretary Kazi Shofiqul Azam, the Shikalbaha project director informed that the start of the physical works awaits the approval of the Cabinet Committee on Public Purchase and there is no major problem right at the moment regarding its implementation.
Regarding the South Asia Sub-Regional Economic Cooperation (SASEC) Road Connectivity Project, where the ADFD has recently declared the effectiveness of the agreement, the project office informed the ERD that the declaration of the effectiveness of the agreement was delayed from the end of the Asian Development Bank (ADB), which is also the lead donor in this project.
It was also learned that the work order for the construction work of the SASEC project could not be issued as because the land acquisition and utility shifting are under process and consequently the ADFD loan amount of $ 30 million will start being utilized from September, 2014 after the issuance of the work order prior to the accomplishment of tender invitation, evaluation and approval process. – UNB

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