The New Nation - Internet Edition

UNB, Dhaka

When the country is smarting from a severe power crisis, the state-owned PDB again failed to install a 90-MW power plant at Fenchuganj in Sylhet.

The plant is now 9 months behind the schedule and officials apprehend further delays.

Sources said a dispute between the Power Development Board and its Chinese contractor over the payment of tax mainly caused the hurdles-and it again raised question about seriousness of the authorities concerned towards resolving the nagging power crisis.According to official sources, the US$ 85 million power- plant project, having three generation units, 2 simple cycles and 1 combined cycle, was supposed to be installed by October last year.

It was learnt that the Chinese contractor, Harbin Power Engineering, brought all the equipment in the country last year and moved to install those at the project site.

But, at one stage of the project works, PDB and Harbin locked horns over the payment of tax and customs duties on the imported equipment.

The National Board of Revenue (NBR) billed about US 5 million as customs duty and other taxes and asked the PDB to pay the dues. But PDB communicated to the NBR that the customs duties and taxes would be paid by Harbin.

When NBR asked the Harbin to pay the bills, it replied that, as per contract, all customs duties and taxes are to be paid by the PDB as employer of the contractor.

This dispute ultimately delayed the project implementation for last nine months, and the issues still remained unresolved.

Harbin officials, however, mentioned another cause of the project holdback, saying that PDB took 18 months additional time to hand over the site for installing a gas booster.

Member (generation) of PDB M Mortuza Ali expressed his hope of completing the installation by next month although the tax-related issues remained unresolved.

"Now, installing the plant is being delayed only for a technical reason… after completion of gas booster, we can commission the plant," he told UNB.

But a top Harbin official disagreed with the PDB's fond hope, saying that unless the tax issues were resolved, they would not be hopeful about the commissioning of the plant.

He said two units, out of three, are now ready to go into operation.