Rebidding for BPC privatization endorsed

-By a Post Reporter

KATHMANDU, Jan 31- Cabinet meeting last Thursday endorsed the recommendation of Finance Minister Mahesh Acharya and Minister for Water Resources Govinda Raj Joshi to initiate rebidding for the privatization of 30-mega watt Butwal Power Company (BPC) that was marred by grave controversy.

The endorsement has come despite request from the two bidders to go for negotiations rather than restarting the whole process.

"We had requested the government to call both the parties for negotiation and reach a logical end of the privatization process of BPC initiated a year back," says Binod Choudhary, a Nepali partner of Independent Power Corporation, (PLC), a British/American power developer and one of the two bidders in BPC.

Binod Bahadur Shrestha, Third Vice-President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and one of the Nepali partners in Interkraft, a Norwegian Power Developer, also says it would have been better had the government called both the parties for further negotiation.

"If the sole motive behind the rebidding is optimization of the price offered for BPC, it would have been maximum through negotiation," says Shrestha.

Choudhary and Shrestha say they are not in a position to say whether IPC/PCL and Interkraft would come for rebidding.

However, they hinted at the possibility of the participation of both the power developers in rebidding by demanding transparency and better modality of privatization.

All the processes of privatization should be made clear in prior to this, said Shrestha.

Choudhary even went a step ahead and said, "Government should learn a lesson from the last episode. Selection of any international power developer should be based on its merits, and weight of any group or institution should not influence it as in the past."

If necessary, government should fix a floor price in the beginning but it should not repeat the past mistake by asking the bidders to upgrade their bids after the opening of the financial bid, said Choudhary.

Both of them also maintained the view that the announcement of rebidding should also include fix time frame by which privatization of BPC will be concluded.

A meeting participated in by Finance Minister Mahesh Acharya and Minister for Water Resources Govinda Raj Joshi on December 9 decided to restart the bidding within two days after Independent Power Corporation (IPC) PLC, informed the government in writing to revoke its bid citing, "irregular circumstances surrounding this privatization."

In a strong-worded letter sent to the Finance Minister Acharya on

December 7, IPC, the British/American power developer, had alleged the ministry of favoring Interkraft, the Norwegian power developer and IPC’s rival bidder for BPC.

The test-case privatization of the 75 percent share of BPC with the installed capacity of 30-mega watt of hydroelectricity was marred by controversy from the beginning amid intensive lobbying from both the parties. Both the parties used their respective political clouts including diplomatic channels to influence the decision in their favour. The lobbying attained its worst form also because the foreign power developers had two of the rival business houses as their local partners. Choudhary Group is the local partner for IPC while Jyoti Group is the leading local partner supported by Panchakanya Group, ICTC Group, and Binod Bahadur Shrestha among others for IPC.

Amid mounting pressure, finance ministry finally asked both the parties to upgrade their financial bids two months back.

Interkraft upgraded its bid to 723 million rupees from earlier 570 million rupees. However, IPC declined to upgrade its financial bid saying the call for upgradation was against standard international practice and continued to stick to its earlier offer of 686.5 million rupees.

IPC’s refusal to upgrade the bid had three main grounds: First, its first offer in the financial bid was higher than that of Interkraft’s offer. Second, the Interkraft’s price was quoted in Nepali currency which was later on converted to US Dollar. The last is, IPC had scored 89 points during technical evaluation of the bid against Interkraft’s 77.

However, it was Interkraft’s offer (after the bid was opened) in writing to the finance ministry that it was ready to pay US$ 11.85 (over 806 million rupees) that perplexed the ministry and restrained it from deciding in favour of IPC. It was precisely because of this reason that the ministry asked both the parties to upgrade their respective bids. The call for upgradation further compounded BPC’s privatization as Interkraft did not upgrade its bid to the promised level of 806 million rupees but offered only 723 million rupees, just above IPC’s initial offer.

Before the ministry could assess the situation, IPC on December 7 unilaterally decided to revoke its bid.

Cabbage most popular vegetable

-By a Post Reporter

KATHMANDU, Jan 31 - Though all the vegetable growers target capital city to get better price of their products, it is cabbage which is most successful among the city dwellers. According to Agricultural Market Information Centre of Department of Agriculture, cabbage is the most sought after vegetable in the capital, thanks to its low cost and availability almost round the year.

The information centre came to the conclusion after processing the data of Kalimati Fruit and Vegetables Wholesale Market. According to statistics, last year 9,661 metric tons of cabbage entered the market. Despite its round the year availability, it is exported least during January to April. Last year these four months saw only 274 metric tons of cabbage in the market.

The statistics have shown even the most popular vegetable potato in the second place. However, the data has taken such a form because red and white varieties of potato have been counted separate. According to market information centre, 8,399 metric tons of red potato and 7,019 metric tons of white potato entered the market in the review period. Similarly, other vegetables to enter the market in huge quantity were onion 7,033 tons, cauliflower from hills 5,683 metric tons, long brinjal 5,511 metric tons, cauliflower of terai 3,290 metric tons, beans 2,928 metric tons and bitter gourd 2,502 metric tons. The least preferred item is green soybean, which entered 1,44 tons last year.

According to the information center, there has been certain increment in the price of rice. As compared to last month’s rates, price of mansuli rice per kilo has increased from 19 rupees to 21.25 rupees and Pokhareli from Rs 29.17 to 32 rupees. However, the price of fine Basmati has decreased from Rs 26.8 to 26.5 rupees.