The government is likely to sign a deal with a Spanish company tomorrow to set up the much-talked-about World Bank (WB) funded 335 megawatt Siddhirganj power project, a senior government official said.

“We are at the final stage of signing an Engineering, Procurement and Construction (EPC) deal with Spanish firm Isolux Ingenieria tomorrow,” Mostafa Kamal, managing director of Electricity Generation Company of Bangladesh (EGCB), said.

Kamal, also chief of the implementing agency, told daily sun Friday that the WB will provide the major portion of the project cost while the rest will come from the domestic sources or other donor agencies.

The government has sought donors’ assistance to mobilise the remaining amount to implement the mega power project, he said.

Earlier, the WB had backtracked from its committed 100 percent financial support for the combined cycle power project supposed to be commissioned within 30 months of the deal signing.

In a letter on 12 January this year, the WB advised the EGCB to look for alternative sources or depend on government funds to mobilise the rest of the project cost.

The WB has already approved the draft agreement with the Spanish company, sources said. The cost of the revised project will rise to $415.1 million from previously estimated $221.1 million, the EGCB boss said.

The WB had committed to provide $221.10 million to implement two units of the peaking power plant at Siddhirganj, each with the capacity of generating 150MW of electricity.

But it disagreed on a proposal to procure equipment from German firm Siemens over graft allegations. The WB then proposed the government to turn the project into a 335-450MW combined cycle one and assured Bangladesh of providing the full amount required for the project.

According to officials, state-owned EGCB invited a tender in October 2010 for the power plant.

The project undertaken in 2004 was delayed due to a long procedure of tendering and re-tendering as the authorities failed to satisfy the WB.

The tender was first invited in 2009 when it was a 300MW-capacity peaking plant project. But the EGCB had to cancel it in response to the WB suggestion.

Later, as per Power Division’s instructions and WB’s suggestions, the EGCB upgraded the project to a 335-450MW combined cycle power plant and quickly invited a tender in November 2010.

The Daily Sun/ Bangladesh/ 27-May-2012