Local entrepreneurs want a level playing field in doing business in the Power, Energy and Mineral Resources sector to tap business opportunities in the country.
"Local entrepreneurs have invested about Tk 56,000 crore in the power sector in the last 15 years. They showed their capability in implementing power projects in the country and abroad, but they did not get any opportunity to get involved in any utility service development activities," a senior local entrepreneur, preferring anonymity, told the Daily Observer on Monday.
Power Distribution Company Ltd (DPDC) floated an international tender seeking quotation from foreign companies for a simple technical work of 11 KV line construction. At least 13 bidders participated in the bidding process which closed on July 15 in 2019, according to sources.
China National Technical Import and Export Corporation became the lowest bidder on January 6 in 2020.
Meanwhile, 99 per cent of the materials of the tendered items are now locally available and these items are supplied to utility services by different Bangladeshi manufacturers.
A senior official of the Ministry of Power, Energy and Mineral Resources said that there are hundreds of contractors who are doing this line construction works in BPDB, DPDC, DESCO and BREB. They have also financial capabilities individually or jointly to procure these goods locally and carry out the work.
At the first stage upon completion of evaluation of Technical Offer from three companies, i) ETERN-CCE (Joint Venture) ii) M/S. Larsen & Toubro Ltd, iii) Confidence Steel Ltd. BREB Cable Industries Ltd and TS Transformers Ltd became substantially responsive and it was decided to open their Financial Offer as per rule.
But later on very surprisingly, China National Technical Import & Export Corporation became technically responsive for opening their Financial Offer under influence of Managing Director/Project Director of DPDC although they have major deviations in their Bid Offer.
The main reason of the lower price offered by Chinese corporation was because they had offered materials from China instead of from Europe/USA/Australia as per the tender requirement.
As such, if DPDC now executes the contract with the Chinese company, the total price will be approximately Tk 1,261 core including taxes whereas if it executes the contract with a Bangladeshi company, the total price will be Tk 992 crore including taxes. It means DPDC can save approximately Tk 270 crore, according to sources.
As per the tender terms and conditions, foreign companies will have to quote CIP price where DPDC will give Customs duty and VAT for importing the materials from abroad. And on the other hand in case of local products to be offered by Bangladeshi company will have to offer the prices which must include all taxes in their prices.
As the tender is international and the total work value is approximately Tk 1,100 crore, it means that the government will have to spend unnecessary US$150 million whereas 99 per cent materials are being produced by Bangladeshi manufacturers and hundred of thousands of Bangladeshi workers are working in those industries.
The local manufacturers are producing 99 per cent of the items, they need to give Customs duty and VAT at the import stage on their raw material import and also VAT on finished products at selling stage and all those taxes goes to government fund.
So, in reality if they buy from local companies more taxes can be ensured by the government compared to import from aboard at exempted rate and moreover local workers can get properly engaged and our own money will be circulated to boost the economy.
