Power Generation: low tariff no guarantee in Kyaukphyu tender

A Hong Kong company has bid the lowest price in a tender to win the rights to build a gas-fired generating station, but that does not guarantee it will win, according to officials.

A total of four bids from private firms are being evaluated to generate electricity for the Kyaukphyu SEZ in Rakhine State, and Hong Kong’s V Power has so far proposed to generate at the lowest price per kilowatt hour, said U Win Myint, chief engineer from the Myanmar Electric Power Enterprise.

The natural gas-fuelled plant is slated to produce up to 50 megawatts of electricity using 20 million cubic feet of natural gas a day.

The current power purchasing price by the Ministry of Electric Power for similar natural gas projects is about US 3.4 cents per kilowatt hour, but V Power has submitted an application to generate power at US2.6 cents, he said.

However, the lower proposed tariff does not automatically ensure V Power will win the tender, in which UK firm Aggreko, China’s Sinohydro and Singapore-based Max Power are also competing, said U Win Myint.

“We are still evaluating the companies’ proposals – none have been selected yet,” he said. “We have to consider lots of factors such as proposed electricity production, amount of fuel and type of generators. We have to review the whole project’s cost and the price of one unit of power.”

The ministry has also considered three different ways to implement the project, by building and running at different capacities given the season. The bidders have also have submitted different proposals for tariffs and capacity depending on the way the project is to be implemented.

For instance, for one of the proposed methods to run the projects, Aggreko submitted a bid at 4.69 cents a kilowatt hour, Sinohydro at 3.35 cents, Max Power at 3.9 cents and 2.6 cents by V Power.

U Win Myint said some of the three ways to implement the project are more feasible than others. He declined to reveal a deadline for the process.


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