Yongtai Energy Rejects ‘Factually Incorrect’ Power Plant Tender Report
Company Demands Retraction Amidst Allegations of Favouritism and Project Delays
Singapore-based Yongtai Energy Pte Ltd has issued a forceful rejoinder, demanding an immediate retraction of a report alleging flawed tender rules and a sole bidder have stalled a $2.5 billion power plant. The company asserts the reporting is misleading and damaging.
Claims of Journalistic Lapses
Yongtai Energy contends the report violated journalistic norms by failing to solicit comments from the company or other pertinent parties. The energy firm insists the article contains significant factual inaccuracies and misrepresents its involvement in the coal supply tender for the RPCL-Norinco International Power Ltd (RNPL) project.
Defending the Tender Process
The report criticized RNPL’s adoption of a “single-stage two-envelope” procurement method, implying it was restrictive. Yongtai countered that this is an internationally accepted standard, compliant with Bangladesh Public Procurement Authority (BPPA) guidelines. This method, they stated, has been utilized by agencies such as BPDB, NESCO, BCIC, and BREB.
Coal Supply and Pricing Under Scrutiny
Yongtai defended the requirement for a coal mine owner’s commitment letter as standard industry practice, crucial for ensuring supply security and quality. The company noted that no other bidders requested extensions or raised concerns about this specific requirement.
The firm also refuted claims that a shift in the coal pricing index from ICI3 to HBA2 benefited them. Yongtai stated the change stemmed from an Indonesian government decision and that they had actually opposed the switch due to transparency concerns.
Tender Adjustments and Bidder Participation
Strongly rejecting allegations of tailored tender conditions, Yongtai highlighted that RNPL relaxed several criteria across four bidding rounds. These adjustments, including reduced coal reserve requirements and allowance for joint ventures, aimed to boost participation. Despite these changes, only four bidders submitted proposals, with Yongtai emerging as the sole technically compliant bidder after extensive review.
The company dismissed as baseless an anonymous quote suggesting other participants were “dummy bidders,” asserting all four were actively engaged and provided clarification letters.
Pricing and Market Position Defended
Yongtai took issue with suggestions that its bid price would increase national electricity tariffs, stating its quoted price was deemed reasonable in official evaluations. They emphasized that tariff structures depend on multiple factors beyond coal pricing, such as financing costs and operational efficiency.
Refuting Favouritism and Delays
Yongtai refuted what it termed “unfounded claims of favouritism,” pointing out that it was not awarded the contract despite qualifying in three separate rounds. The company also rejected any implication that it was responsible for project delays, labeling the claim as legally and factually inaccurate.
A Publication’s Defense and Impact
In response, the original publication reaffirms the accuracy and public interest of its reporting. The report was based on thorough interviews with officials from the Power Division, BPDB, and RNPL, focusing on how the tender’s design might have limited competition.
The publication clarified that its mention of the “single-stage two-envelope” method, compared to the more competitive “two-stage” method used in similar projects, was a factual comparison, not malicious intent. They noted that Yongtai was consistently the only bidder to meet the mine owner’s commitment letter requirement, a detail verified by multiple officials.
Regarding the index change, the publication stated that Yongtai’s “verbal opposition” lacked procedural value, and no written objection was submitted. They also reported that three bidders were disqualified after the unilateral index change by RNPL, with Yongtai allegedly having advance knowledge.
Officials indicated to the publication that while tender specifications were softened, they appeared to align predominantly with Yongtai’s partner, Bukit Asam. This led other bidders to perceive the tender as predetermined, contributing to Yongtai’s consistent status as the sole qualified bidder.
Internal discussions at RNPL revealed board members debated Yongtai’s pricing, urging a reduction, which contradicts the company’s claim of reasonableness. The publication highlighted this potential renegotiation mid-evaluation as a breach of procurement protocols.
The publication stated that Yongtai’s claim of other bidders’ active participation is not supported by documentation, with most failing to submit critical requirements. It also noted that none of the four bidders responded to TBS’s requests for comment.
The report attributed project delays to restrictive tender design and high pricing, not solely to Yongtai. The consistent emergence of Yongtai as the sole qualified bidder raised questions about potential favouritism in the specifications.
Notably, RNPL, the tendering authority, has not issued an objection to the report, leaving Yongtai, a qualified bidder, to respond extensively.
Inquiry Committee Formed
Following the report’s publication, the Power Division established an inquiry committee to investigate potential favouritism within the tender structure, underscoring the report’s credibility and impact. An investigation by the Bangladeshi government into alleged irregularities in the tender process is reportedly ongoing as of late 2023, with officials citing the tender’s repeated failures to secure competitive bids.
The publication stands by its reporting, asserting that Yongtai’s rejoinder fails to disprove the presented facts or address the core concern: a stalled major national power project due to a repeatedly flawed tender process.
