Deal signed for 50 MW rental power project

Chittagong: The Power Cell of the power ministry signed a deal on the 50 megawatt Sikalbaha, Chittagong, rental power project with a joint venture led by Royce Power Engineering of Hong Kong and two local companies for a three-year term.

Earlier this month, the Cabinet purchase committee of the caretaker government approved this power project that will use cheap but environmentally hostile Heavy Fuel Oil (HFO).

Local companies Asian Entech Power Corporation and Shasha Denims hold 49 per cent of the stake in the investment of around Tk 200 crore.

Although the contract does not have environmental obligations, a representative of the joint venture told The Daily Star that the rental project would obtain World Bank (WB) financing and would ensure the environmental standards of the WB. These standards relate to the HFO fuel treatment facility, pollution from the engine and sound.

In evaluating the bid, the Power Cell did not work on the environmental aspect of HFO nor did it seek any documents from Royce about how the environmental issues will be handled.

It sought proposal for the 50 MW Sikalbaha plant in October. Though rental power is costlier than conventionally produced power, this projectsupposed to be installed in six months after signing of agreementhas been taken up considering a severe power crisis in Chittagong.

The cell floated tender seeking offers for both diesel and HFO based power plantsalthough the price of diesel is much higher than the HFO.

Meanwhile, the local partners of Royce Power are also involved with four small power projects (SPP) as Doreen Power. Of these, a 22mw SPP in Tangail began commercial operation last month, while a 22 mw plant in Narsingdi and another 22 mw in Feni are expected to commission this month. Another 11mw plant in Feni would launch operation in January.