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Kathmandu Friday October 20, 2000 Kartik 04, 2057.
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Three MNCs to compete for BPC
Post Report
KATHMANDU, Oct 19 - The second tender call for the privatization of 30-megawatt Butwal
Power
Company (BPC) is likely to bring in a triangular competition among three multinational
(MNC)
power developers.
Pacific Hydro, an Australian multinational power developer has entered the competition
ring in
alliance with ICTC group as the local partner.
The entry of Pacific Hydro brings in a third vertex of competition as the two finalists
during last
bidding—Independent Power Corporation(IPC)/PLC, an American British Power Developer
and
Interkraft, a Norwegian power developer—are also competing to win BPC for the second
time.
With the entry of a third party, officials in the ministry of finance are upbeat that the
price offered
to BPC, one of the few profitable state-owned enterprises, would shoot up.
Though Khetan Group, one of the leading business houses, has also obtained application
from
Privatization Cell, ministry of finance, Rajendra Khetan, Managing Director of Khetan
Group,
informed The Kathmandu Post that it would refrain from bidding. "We are not
submitting bid as
we could not reach an agreement with our prospective foreign partner," said Khetan.
Since the final deadline for submission of bid expires only on October 31st, theoretically
there is
still room for more parties entering into competition. However, the government officials
seem less
hopeful for other strong contenders.
The expected triangular competition is not only among the multinational power developers
but
also among three leading business houses of the country. Choudhary Group, Jyoti Group
(including some other partners) and ICTC Group are the local partners of IPC/PLC,
Interkraft and
Pacific Hydro respectively. The competition has an added flavour also because ICTC Group
and
Choudhary Group were initially competing for BPC as local partners of IPC/PLC but ICTC
Group
switched the side and joined hands with Jyoti Group at the eleventh hour during the last
bidding.
The test-case privatization of 75 percent share of BPC was scrapped by the government last
December amid mounting controversy but only to recall the tender last September.
Cancellation
of the first tender was prompted by IPC/PLC’s unilateral revocation of its bid
alleging "irregular
circumstances surrounding BPC’s privatization." In a strong-worded letter sent
to Finance
Minister Mahesh Acharya on December 7, last year, IPC had alleged the ministry of favoring
Interkraft, IPC/PLC’s only rival bidder in BPC.
Much to the frustration of Interkraft, the government scrapped the whole process only two
days
after IPC/PLC’s withdrawal.
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