ISLAMABAD, May 19: The federal government has cleared three local and international firms, out of a total of 20, for final selection as financial adviser for the competitive bidding of three $1.5 billion thermal power stations soon. Informed sources said the three firms have been asked to give their presentations and the detailed package of services and its cost so that one of them could be selected as financial adviser.

These three parties include CitiBank Group, ABN-Amro Bank, and Khadim Ali Shah Bukhari (KASB) Bank. They would give their presentations to the Private Power and Infrastructure Board (PPIB). These sources said another group Bearing Point/Lexicon Group had also been cleared by the government but its proposal was rejected for being conditional.

These sources said the PPIB analyzed the technical capabilities of 20 parties, majority of them are currently working with the Privatization Commission as financial advisers for different transactions.

After detailed scrutiny, only six were found suitable. However, only four of them submitted their requests for proposals, including one conditional request which was turned down.

The PPIB had decided a couple of months ago to hold an international competitive bidding (ICB) for the setting up of three thermal power projects worth $1.5 billion. The projects to be situated in Lahore, Faisalabad and Uch would have a combined power generation capacity of about 1,200-1,400mw.

The PPIB has already invited bids from local and foreign firms and consortium to set up these private thermal power plants of 1200-1350mw capacity at an estimated cost of about $1.5 billion.

The last date for submission of proposals for three dual-fired and combined cycle independent power plants has been fixed as June 20, 2005. This is for the first time that independent power projects (IPPs) would be set up through international competitive bidding to meet around 5,500-mw power shortage estimated for the year 2010.

The competitive bidding and evaluation of the bids would be carried out by the PPIB under the supervision of the National Electric Power Regulatory Authority (Nepra) and the lowest evaluated levelized tariff would be the main criteria for selection of successful bidder.

The first project, 400-500 mw gas-based power project at Uch, will be located near Wapda’s existing power station at Guddu, Sindh. Using low btu (British Thermal Units) from Uch gas field, available for 25 years, the project will be based on combined cycle technology. The project will comprise two gas and one steam turbine.

The required gas quality for the project is 160-180 mmcfd (million cubic feet per day) and the cooling water requirement is 270-300 cusec which is available. National Transmission and Despatch Company (NTDC) will be the power purchaser while Oil and Gas Development Company Limited (OGDCL) will be the gas supplier.

The second project, 450-mw power plant at Faisalabad, will be located very close to the Wapda’s own power station, exactly at the load centre. It will also be a dual fuel based i.e. pipeline quality natural gas and oil. The project will use combined cycle technology and its gas requirement will be 90-mmcfd.

Faisalabad Electric Supply Company (Fesco) and NTDC will be the power purchasers while Sui Northern Gas Pipelines Limited (SNGPL) will supply the gas. It will have two gas and one steam turbine.

The third project, 350-400 mw project would be located at Chichoki Malian near Lahore. It will be dual fuel (gas/oil) and will be based on combined cycle technology. The gas requirement of the project will be 70-mmcfd.

Lahore Electric Supply Company (Lesco) and NTDC will be the power purchasers while SNGPL will supply gas to the project. This project will also have two gas and one steam turbine.

The sources said that some new investors like Brazil Energy, General Electric, Al-Ghorair, Bestway Group and Marubeni have also shown their firm interest in participating in the upcoming projects through the ICB.

The government plans to install power projects of 7,500mw with a total investment of around $8 billion in the next 8-10 years in order to combat the looming power shortages. It has also been decided that in order to provide level-playing field and transparency, the projects would only be awarded on the basis of international competitive bidding instead of negotiations.

The three projects were marketed in Dubai and London in February and March through road shows. They received considerable interest from investors. In these shows four thermal power projects and seven hydro power projects with the total generation capacity of approximately 3,600mw were marketed to the potential investors, lenders, contractors, consultants, equipment suppliers, financial advisers, etc.