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Kathmandu Thursday January 24, 2002 Magh 11, 2058.
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BPC sell-off brews another
controversy
Post Report
KATHMANDU, Jan 23 The three-year long lingering
privatization of Butwal Power Company (BPC) inched ahead after the financial bids of the
two rivals – Independent Power Company-Nepal (IPC-Nepal) and Interkraft Nepal –
were opened today.
Though the quoted amount of the both rivals are
higher than their previous offers, the third-round of privatization process has kicked up
yet another controversy following allegations that the financial bid submitted by
Interkraft Nepal is incomplete.
According to a source close to the bidding
process, the financial bid document of Interkraft Nepal "seriously lacks some of the
important elements as the bid documents does not explain in detail the capacity to pay for
the shares."
The government is privatizing 75 per cent of BPC
shares. BPC is a 30 megawatt company comprising of various hydroelectric projects.
Given the latest controversy, it is unclear how
the government will proceed in the matter. It should be recalled here that during the
second round bidding for the purchase of the BPC’s shares, the technical bid of the
IPC-Nepal was canceled on the grounds that it failed to produce authorized signatures in
the covering letter of the bid. IPC-Nepal then was ousted from financial bidding, leaving
Interkraft alone in the battlefield. The financial bid of Interkraft was also canceled
later as amount quoted in words and numbers differed in the financial bid. Both the
companies have been rivals since the first bidding.
Of the latest bid, sources said that the
Interkraft bid documents also failed to produce convincing arrangements of funds from its
financier to ensure the availability of the funds if the finance is not being made from
the existing resources.
In the like manner, the bid documents also lacks
a written confirmation from its bank guaranteeing specific amount of finance for future
commitments, a high-ranking source said.
The source argued that Interkraft’s bid
documents are invalid on the grounds that it has failed to comply with the bid conditions
clearly stated in the one of the clauses in the bid documents.
However, a source associated with the Interkraft
Nepal refuted the allegation and said that the financial bid of Interkraft "contains
all the requirements set by the Information memorandum and bid documents."
In the financial bids that opened today
Interkraft has quoted around Rs 950 million that includes 874.2 million in Nepali currency
and US $ 1 million. The remaining 30 per cent of the total amount is payable later,
according to the bid. Similarly, the IPC-Nepal has quoted Rs 866 million, fully payable
during the signing of the handover agreement.
The financial bids of the both the rivals,
opened today and would be thoroughly examined by a 5-member committee and is expected to
submit its final report within two weeks.
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