The projects are 100 MW first phase of Chandpur 150 MW power project, Fenchuganj 90 MW project and 450 MW Meghnaghat-2 project.

Contracts for the first two projects were awarded to incompetent and blacklisted Chinese company Harbin and for the third one to Scamster Obaidul Karim's inexperienced BON Consortium.

Controversial Hawa Bhaban played the lead role in these deals. Hawa Bhaban leaders were helped by a section of unscrupulous officials of Power Development Board (PDB) and the power ministry, who still hold the same strategic posts that they held during the alliance government's tenure. They played important roles in bending government rules and misinterpreting regulations to make the nation swallow these deals, insider sources say.

Blacklisted Harbin is now backtracking from signing the final contract to set up the 100 MW first phase of Chandpur 150 MW Power Project. Harbin wants the PDB to revise the project cost to $65 million from its original offer of $ 45 million.

"The PDB is now seeking the power ministry's decision regarding this project. The power ministry sought the law ministry's opinion as to whether this bid could be cancelled or not," said a PDB official.

Harbin was awarded the Chandpur contract in a controversial tender that saw serious complaints of corruption another Chinese company CMEC filed with a review panel of the planning ministry. Sources alleged that a group of PDB officials in connivance with Hawa Bhaban had favoured Harbin for huge kickbacks.

On the other hand, Harbin appeared as the lowest bidder in all tenders floated during the alliance government's tenure by initially showing a low offer by hiding huge costs. In a tender for the Asian Development Bank (ADB) - funded Siddhirganj 240 MW power project last year participated by Harbin, the project's consultant detected that Harbin hid around 15 percent project cost.

The Daily Star in a report last year showed that Harbin had hidden about $16 million cost in Chandpur power project. The then alliance government had approved Harbin's flawed bid for this project strongly arguing that its bid offer is $45 million as against $51 million of its Chinese competitor CMEC.

The caretaker government formed a committee to scrutinise the Harbin deal. The committee cleared this deal as it largely depended on information given by the same PDB officials who helped Harbin bag the deal. The committee however strongly suggested that the project cost cannot be increased and it should be strictly monitored.

The PDB set June 11 for signing the final agreement with Harbin. But at the last minute, the Chinese company in a letter refused to sign the deal. It said the contract was supposed to be signed one year ago. And the bid validity expired one year ago. Harbin also said it would withdraw the performance guarantee of Tk 30 crore that was issued against the project.

The PDB then asked Harbin to sign the deal. But the company argued that the plant and equipment price had gone up globally in the last one year. It would only sign the deal if the PDB agreed to increase the cost to $65 million.

As the PDB cannot do this, it wrote to the power ministry for a decision. The ministry then sought the law ministry's guidance in this regard.

"If we go for re-tender now, it will kill about 8 to 10 months. Besides, the project cost would increase by about 20 million dollars," said an official.

"The government should have scrapped the Harbin deal long ago. It had no practical experience in installing power plants excepting the Tongi plant (which is highly flawed). If we must spend more money, we should not sign a deal with a company that was blacklisted by a government agency (Eastern Refinery Ltd) for failing to commission a small 3 MW plant," said a power expert.

Harbin is also implementing 90 MW Fenchuganj power project under a contract that was signed in mid-2005 with a 10 percent down payment amounting to Tk 52 crore made to Harbin in violation of government norms. But the company has suspended implementation of the project due to tax related complications.

Sources said the National Board of Revenue (NBR) has imposed huge tax on Harbin against the project. This tax was previously exempted illegally through a government order issued under the influence of ex-finance minister Saifur Rahman's son.

"The PDB has requested the NBR to resolve the matter as soon as possible. This is the only power project under implementation now," a PDB official said.

Contract for the Fenchuganj combined cycle power project was awarded to Harbin in its fifth round of re-tender. Interestingly, the PDB had disqualified Harbin as a bidder for this project in the third round tender in 2002, when this company made its first successful entry into Bangladesh's power sector by bagging the Tongi project using Hawa Bhaban's influence.

Harbin bagged the bid by making an offer at Tk 524 crore. In the previous tender, Japanese company Sumitomo had made an offer of Tk 500 crore but the bid was cancelled after it withdrew from the bidding alleging the PDB had sided with Harbin.

Meanwhile, Obaidul Karim's shell company BON Consortium that failed to meet its May 28 deadline for financial closure of the 450 MW Meghnaghat-2 project has been offered deadline extension by amending the relevant contract.

The PDB on June 11 told BON to submit $10 million performance security and then get a specific deadline for financial closure.

But on June 23, BON proposed December 31 as deadline for financial closure and August 25 as deadline for submitting performance security.

In response, the PDB said BON must furnish the security deposit by July 15 and then fix the financial closure.

"The problem with BON is that it has no reputed financial institution backing it up. The PDB is giving options to BON based on its May 27 request, accompanied by a letter of Bahrain-based Capital Management House (CMH). We never heard of any CMH in the power sector financing," said a power expert.

PDB's experts had repeatedly expressed doubts about BON's capability to implement the project, saying the earliest the government scraps the BON deal and goes for a re-tender, the better it is for the nation.

The BON Consortium failed to meet its May 28 deadline for financial closure, blaming "political instability" in the country. On May 27, it requested the government to allow it an additional seven and a half months' time for financial closure.

BON is comprised of UAE's Belhasa, Obaidul's Orion Power and German company Steag, which is the leader of the consortium. But Steag has never been visible in Bangladesh.

Apparently, Belhasa group is the only visible 'moneyed' partner. But Belhasa is not a power plant developer and its website does not even mention any Bangladeshi project.

Actually BON never made the bid that was selected for this power project, and it just submitted its name as one of the two partners of Japanese bidder Nisso Eiwi, which has the experience to qualify for building such a power plant. But Nisso disappeared from the scene in 2004 and Orion brought in Steag showing it as the lead bidder.