After serving it with a contract termination notice last month, the Power Development Board (PDB) allegedly under pressure from an influential quarter Wednesday accepted security deposit from a power company owned by Hosaf Group for setting up Fenchuganj 50 megawatt rental power plant.
On March 30, the PDB served Hosaf's company Energy Prima with a notice of default and intent to terminate the contract for a three-year rental power project in Fenchuganj for repeatedly failing to provide performance guarantee.
This rental power plant was supposed to start operation late next month to ease load shedding this summer. Now, Energy Prima is virtually allowed to delay it by two months by compromising the purpose of this fast track project.
Though Energy Prima did not fulfil bidding criteria, it was awarded four rental power contracts out of eight in January with the goal of bringing these small and easily installable plants into operation this summer. These eight plants are supposed to add 300 MW power to the national grid during the summer and ease load shedding to some degrees.
Energy Prima was supposed to deposit $3.06 million in bank guarantee for the Fenchuganj project back on February 7. But the company failed to do so despite reminders, and extension of time till March 24 as per the contract.
The contract did not allow time extension beyond March 24 unless both the PDB and Energy Prima had agreed on the matter. As there had been no such understanding, the PDB served the termination notice on March 30. However, on March 31, Energy Prima sent a letter saying that it would deposit the money by April 15.
"But this has no legal basis. Termination notice has been served as Energy Prima has violated all terms and conditions of the contract," said a PDB source.
But an influential quarter is learnt to have mounted pressure on the PDB not to enforce the termination notice nor go for a re-tender of the rental power project.
Instead, the PDB was asked to accept Energy Prima's bank guarantee of $3.06 million submitted on Wednesday with the date mentioned as April 15. The guarantee is valid till June 4.
After bagging deals from the government in mid-January, Energy Prima has been using various pretexts to get extension of commercial operation dates (COD) of the three other rental projects -- Kumargaon 50 MW, Shahjibazar 50 MW and Bogra 20 MW power plants.
At first, on January 31, Energy Prima deposited bank guarantees for Kumargaon and Shahjibazar projects in Bangladeshi taka, instead of dollars-- as required by the contract. The PDB on February 24 asked the company to deposit this guarantee in dollars.
On February 9, Energy Prima asked the PDB to extend the time for COD arguing that the project sites were not prepared for installation of machinery. The PDB however replied that as per the contract, the COD has to be 120 days after the contract execution date, and there is no scope for allowing extra time. These three projects are supposed to begin operation on May 16.
Hosaf is owned by Moazzem Hossain, one of the main accused in a case filed by the Anti-Corruption Commission last month. Moazzem is the brother of Mosharraf Hossain, who was a BNP parliamentarian from Feni. Moazzem had received unusual favour from autocratic ruler HM Ershad regarding Raozan power project, then from the first Khaleda Zia government for Barapukuria coal mine project and finally from the second Khaleda Zia government for Barapukuria coal mine and power projects.
Moazzem is accused of corruption involving contracts for Barapukuria coal mine but he was tipped to flee the country a week before the ACC filed the case.
Energy Prima and Hosaf Meter are both owned by Moazzem Hossain. Energy Prima has been shown as 'Local Agent' without explaining whom it represents and how it is linked to power sector.
The Power Cell floated the rental power bids in October last year, drawing 13 offers from five companies for seven locations. On November 19, the cell floated another tender to draw offer for the eighth location and received two more such offers.