Staff Correspondent

Two foreign companies, selected by the government for setting up two short-term rental power plants, have apparently desisted from signing the agreements with the Power Development Board after a breakdown in negotiations.

The representatives of Alstom Power International of the USA and Agreeko International Projects of Singapore, who were supposed to the sign the contracts for setting up a 20 MW plant at Bheramara and 40 MW plant at Khulna respectively on January 16, have already left Bangladesh without signing the agreements, said sources in the Power Cell.

The companies, at the last moment before signing the agreements on January 16, demanded some changes in the contracts including changes in the penalty clause, which the government refused to fulfil.

The representatives left Bangladesh after two days of futile negotiations. With uncertainty hovering over the signing of these agreements, the government is unlikely to implement fully its plan to add 260 megawatts of costly electricity from seven rental power plants in this summer as so far agreements for setting up only five power plants with a combined capacity of 200 MW within 120 days have been signed.

Two other selected joint venture companies, however, signed agreements for setting up five other rental power plants — a 50 MW plant in Shahjibazar, a 50 MW one in Kumargaon, a 50 MW one in Fenchuganj, a 20 MW one in Bogra and a 30 MW one in Bhola on the build-own-operate basis. Despite the departure of the representatives of Alstom and Agreeko, power officials were still hopeful that a consensus on the agreements' clauses could be reached, but said that they would not change the contracts in a way that might be unjust to other companies that have already signed contracts.

'The companies are still maintaining contact with the Power Cell and negotiations are still continuing,' power secretary M Fouzul Kabir Khan said on Monday. He, however, said that the government would not allow changes in the contracts that would decrease the PDB's revenue earning. When he was asked when they would conclude negotiations with the companies, Fouzul replied, 'We are still negotiating. Let's see what happens.' The interim government initially planned to allow the setting up of eight short-term rental power plants from which the PDB would purchase 300 MW of electricity at a higher rate for three years to meet the high demand for electricity during the summer.

The fate of the 50 MW Ashuganj power plant, however, became uncertain after its promoters demanded a higher price offer from the government. The Power Division recently asked the Power Cell to issue fresh tender for the Ashuganj plant.

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