DPDC deal with additional $450m just for electrical goods

According to the DPP, the Chinese contractor TBEA asked for over USD 2.10b (USD 210 crore 25 lakh) just for electronic goods of the project. DPDC slashed this by almost half and informed TBEA that not more than around USD 1.11 billion (USD 111 crore 18 lakh) would be required for the electronic goods.

During these negotiations, DPDC approached Bangladesh University of Engineering and Technology (BUET) as an independent consultant. After examining the matter, BUET's Bureau of Research Testing and Consultation (BRTC) informed DPDC that the cost of the electrical goods would be USD 870.6 million (USD 87 crore 6 lakh) at the most.

DPDC, however, ignored BRTC's estimation and signed a deal with the Chinese contractor for USD 1.32 billion (USD 132 crore 22 lakh). This means, Bangladesh is having to pay an extra USD 451.6 million (USD 45 crore 16 lakh).

Questions have arisen about DPDC awarding TBEA this contract in this manner. Experts say that if this is the state of electronic goods alone, it is easy to conceive at what a highly inflated cost the entire project is being implemented.

Former director general of the government's Central Procurement Technical Unit (CPTU), Faruque Hossain, said, "When the contractor is selected from beforehand, you can't drive a hard bargain. The bargaining is just a lot of eyewash. And so the Chinese company has bid an amount much higher than the actual cost. It is indeed a mystery why the government did not take the BRTC BUET assessment into cognizance." Faruque Hossain feels that in this time of the dollar crisis, unnecessary expenditure and exorbitant costs should be curtailed and the project be drawn up anew.

The civil engineering work of the project, including landfill, exceeds Tk 40 billion (Tk 4000 crore), to be paid in local currency. But these amounts have been left in dollars so as to evade VAT and taxes. Then again, TBEA took a team to the UK last month to visit a factory CEWE, to see meters to be procured for the substation. Certain officials in DPDC also find it mysterious why CEWE was being selected when there were much better companies in the meter market around the world.

It is evident from the DPP, from the letter sent by DPDC to TBEA, from the multilateral meeting chaired by the power secretary and from talking to concerned persons, that the project is proceeding amid all sorts of irregularities and discrepancies.

Speaking to Prothom Alo in his office on 7 August concerning the price of electrical goods, the DPDC managing director (MD) Bikash Dewan said that generally speaking, BRTC BUET's assessment is accurate. He said that the project director (PD) Mahbubur Rahman would be able to say whether the price of the electrical goods had been inflated, and if it was, why was this so.

When a visit was paid to PD Mahbubur Rahman's office on 11 August, he immediately said that he would not speak about the price of the electrical goods. He said, there was just around one year nine months left for the project to be completed. However, TBEA had applied for a two-year extension of the project and till last June, 30 per cent of the accumulated work had been completed.

This project was taken up five years ago, to the effect that power distribution facilities could be availed from it up till 2035. In the DPDC annual report published on 13 January, it was said that as the result of this project's successful implementation, there will be a ground-breaking change in the distribution network of DPDC areas.

The decision to implement the project under concessional loan from China was taken on 31 January 2016 at a meeting chaired by the power secretary at the time, Ahmad Kaikaus. At the same meeting it was decided that BRTC BUET would be the project's independent consultant. BRTC would assess the costs of the goods and services included in the commercial contract.

The agreement was made for government loan at 2 per cent interest from China's EXIM Bank and for preferential loan at 3 per cent interest. The loans total Tk 117.77 billion (Tk 11,777 crore). The government part of this is Tk 74.41 billion (Tk 7,441 crore) and DPDC part Tk 12.49 billion (Tk 1,249 billion).

Professor of civil engineering at BUET, Ekramul Haque, was involved in preparing the relevant report. Speaking to Prothom Alo, he said, "We gave our views about the cost of the project's electrical goods after studying the prices. It is certainly a question, why the prices were inflated later. I do not know how the work is proceeding now. There was need for a high-level committee of experts for the work to be carried out well. That has not happened, as far as I know, and so it would not be surprising if questions arise regarding the quality of the work."

Under the project, 14 new substations of 132/33KV capacity and 26 new substations of 33/11KV are to be set up. Also, the capacity of eight of the existing 132/33 KV and four 33/11 KV substations, will be increased. And offices and commercial buildings will be constructed in Tejgaon, Paribagh, Hatirjheel and Kakrail.

According to the DPP, the substations will be are Chashara, Adamjee and Pagla in Narayanganj; and Goran, Taltala, Green Model Town, Nabinagar, English Road, Basila, Matuail, Signboard, Narinda, Shyampur, Shitalakkhya, Dhanmondi, Bangabhaban, Tejgaon, Kamrangirchar and other areas in Dhaka.

DPDC MD, Bikash Dewan, himself expressed apprehension, telling Prothom Alo that a big challenge of the project was that a number of substations could not be set up. Certain government agencies were not giving permission to dig up the roads and there were also delays in land acquisition.

Highlighting the new challenges, PD Mahbubur Rahman said, "There is need for new power sources, but the work hasn't started yet. Power is supposed to be received from Power Grid Company Bangladesh (PGCB). We hope PGCB increases it sources or else there will be no benefit from these big projects."

According to DPDC sources, there are 37 Chinese nationals working on this project. After looking into the project management, technical management and other parts of the project as well as perusing the résumés of those involved, DPDC found that the qualifications of 22 of them, including the project manager Xiao Ji, fell short.

It was said that Xiao Ji lacked in adequate technical qualifications. The project manager should be an engineer, which he was not. When called over the mobile phone on Friday, Xiao Ji did not respond, nor did he respond to an SMS.

Deputy project manager (site), Fung Chunji also lacked in qualifications. The logistics director had only two and a half years' experience. The technical supervisor has no experience in the construction of high rise buildings.

DPDC sends a letter to the TBEA head office on 8 January 2019, saying that many of the persons involved in the implementation of this project lack in qualifications and experience. TBEA should replace them with qualified persons while the project is underway.

When asked how Xiao Ji was being kept on as project manager despite not being an engineer, DPDC MD Bikash Dewan said, "Reminders are being given to change them."

Concerned persons, however, said that DPDC should have given a two or three-month deadline for a new project manager to be appointed. They did not do so. That means there is something wrong there too.

There needs to be emergency arrangements to extinguish any fire that may break out in the substations. The Nitrogen Injection Fire Fighting System (NIFFS) is now used globally for the purpose. But in this project, arrangements have been made to lift water from underneath the substations. Experts fear that extracting water from underneath may lead to a collapse of the substations.

Meanwhile, it was said at a high level meeting that the substations will be digital. That would mean from the primary to the secondary level, all the equipment will be digital. But instead, convertor equipment is being used to depict it as digital. Data will be transferred through copper fibre, though the agreement is for this to be done by means of optical fibre.

Learning about this state of the project, power secretary Md Habibur Rahman held a meeting in March with all parties concerned. This was attended by DPDC, TBEA, the PD office and Chinese ambassador in Dhaka Li Jiming. Sources in the meeting said that secretary Habibur Rahman recommended that qualified Chinese personnel be appointed to improve the quality of the project. The Chinese ambassador also told the meeting that he welcomed the appointment of new personnel.

Power secretary Habibur Rahman, speaking  to Prothom Alo, said, "We want the successful implementation of the project. All that is needed for this, will be done. If there are any irregularities, investigations will be carried out and action will be taken."