A highly placed source in the RPCL said that with the aim of commercial operation from August, the plant is now generating around 60 MW of power. "Given the present level of daily load shedding of 2,000 megawatt, this small addition to power supply is also a good news."

He went on, "It is true that the plant is very costly and it had landed in a deep financial mess because of corruption in the RPCL in the past. But we had signed a contract for this project with German company Siemens, and it had to be completed."

The power project being implemented at a cost three to four times that of similar projects of Power Development Board (PDB) was supposed to go into production in 2005. But financial problems alongside conflicts with the plant's controversial operation and maintenance contractor LIPPS had slowed down implementation of the project.

"On the brighter side, this power plant is becoming fully operational soon," says RPCL Managing Director Md Nazmul Hossain Chowdhury. "Rural Electrification Board (REB) in a study has determined that once we can complete this project, RPCL will become financially sound within the next five years."

The third unit of this power plant also converts the simple cycle plant into a combined cycle one. Two previously installed simple cycle 70 MW units used gas to generate power. The new unit will use steam created by power generation in the old units, and generate 70 MW additional power without using extra gas.

"The combined cycle technology is costlier than simple cycle. Secondly, air cooling system of this plant uses recycled or made up water instead of using direct water sources, and that is also costly," said a top official. "But we believe that the project could have been implemented with $90 to 95 million at the maximum."

The RPCL has already paid the project's contractor Siemens $100 million. The company that refrained from completing the project for months demanding payment, will be paid the rest by December. Siemens was awarded contract for this project on the basis of unsolicited negotiations in 2005, and it was supposed to be completed within that year.

The RPCL is also entertaining German consultant Lahmayer, which made the RPCL to sign this power deal at an inflated cost. Again, ignoring objections by Asian Development Bank, the RPCL appointed Lahmayer through unsolicited negotiations allegedly under the influence of AZ Rezaul Haq, local agent of that company. In the past, Rezaul Haq had also represented Siemens.

"At this point, we are compelled to take Lahmayer's services because it had been involved with this project from the beginning. Once this is over, we will not need its services," said the top official.

Compared to the $120 million profile of this 70 MW combined cycle plant, it took US company AES only $170 million for Meghnaghat 450 MW combined cycle plant. The PDB installed a 70 MW simple cycle plant in Shahjibazar with $30 million only in 2001.

The RPCL signed contract with Siemens in March 2005 in which it committed to open a letter of credit for the German company by June 1, 2005 so that the contractor can import plant equipment. But the RPCL was denied a major German grant in fiscal 2004-05 on ground of corruption, and it landed in a financial crisis. Since then, implementation of the project slowed down unusually.