The New Nation - Internet Edition

UNB, Dhaka

The Power Ministry wants the Rural Power Company Limited (RPCL) to setle its dispute with the former German-based LIPPS (Lahmeyer International Palli Power Services) outside the court

The Power Ministry has already requested the Law Ministry to take measures to sit with LIPPS across the table for an out of court setlement

"We've already referred the mater to the Law Ministry seeking its opinion… also requested it to take measures to setle the dispute with LIPPS outside the court," Power and Energy Adviser Tapan Chowdhury told UNB.

Following a dispute on illegal termination of a power plant operation and maintenance contract, the LIPPS last year won a Tk 200 crore international arbitration case against RPCL at Singapore International Arbitration Centre (SIAC).

The RPCL was established jointly by the Rural Electrification Board (REB) and five rural electricity co-operatives known as Palli Bidyut Samity (PBS) which set up the 70 MW Mymensingh power plant (Phase-I) in 1999 with the financial assistance of Asian Development Bank (ADB).

After installation of the Mymensingh plant, with the ADBN guidelines, the RPCL appointed the LIPPS for Operation and Maintenance (O&M) of the power plant under an international agreement

LIPPS was basically a joint venture enterprise of RPCL and its German consulting counterpart Lahmeyer International GmbH.

RPCL and Lahmeyer respectively had 35% and 65% of shares in LIPPS. Later, under the direction of the donor agencies, RPCL divested its entire 35% share in LIPPS to Lahmeyer GmbH. In the meantime, a Bangladeshi entrepreneur, who was the local representative of Lahmeyer, took over the LIPPS from its German owners. Since 2000, the LIPPS had been successfully operating the Mymensingh plant that led the RPCL to obtain the Asian Development Bank's recognition as a best power plant in Asia.