The Ministry of Electricity and Energy will announce in the coming weeks the winners of a tender for 30 solar projects that received more than 150 bids, many from Chinese companies.
By THOMAS KEAN and HTIN LYNN AUNG | FRONTIER
The Ministry of Electricity and Energy will soon announce the winners of its billion-dollar solar tender, officials say, after receiving more than 150 bids, the majority from Chinese companies.
The ministry announced a tender for ground-mounted, on-grid solar plants at 30 sites totalling 1,060 megawatts in May.
An unofficial list of bids seen by Frontier shows 155 were submitted for the 30 sites on offer, with Tanyaung in Magway Region receiving 13 bids and Thapyaywa in Mandalay Region receiving 12.
Frontier was not able to confirm all details on the list with bidders, but some companies who participated in the tender confirmed the details were correct for sites that they bid on.
Private Chinese firm Sungrow was the largest bidder, submitting bids for 24 of the 30 sites, while state-owned companies China Machinery Engineering Corporation and Datang Power each submitted more than 10 bids, according to the document. None of these companies could be reached for comment.
The ministry’s Electric Power Generation Enterprise originally set a one-month deadline for the tender, but was forced to push back the final submission date by a month, to July 17, following an outcry from investors over the short deadline.
Still, the number of submissions took many by surprise given the challenges in putting a bid together, particularly the need to have already secured land. This was complicated further by domestic and international travel restrictions related to COVID-19 that were in place during the bidding window.
“All bidders were surprised,” said one bidder. “We expected three or four bids for each site at the most.”
The bidder, who spoke on condition of anonymity due to the sensitivity of the situation, said it was perplexing how some Chinese companies had managed to bid for so many sites given the difficult nature of the tender.
Daw Su Su Soe, the ministry’s deputy secretary for domestic and international relations and information, said that the ministry received “nearly 200 bids” but added that she did not know the exact numbers.
“The bidders include companies from Asia as well as Europe,” she told Frontier on July 30. “The tender selection committee are mostly focused on carefully checking the bids against the technical criteria … They will announce the winning companies next week.”
Deputy permanent secretary U Soe Myint referred questions to EPGE but the enterprise’s deputy superintendent engineer U Ye Tun Zaw said he had no information on the status of bidding.
Under the request for proposals, the selection committee was supposed to announce the list of “responsive” bidders – those that meet the criteria – within 15 days of bid submission, on August 1. It is then scheduled to reveal the price proposals five days later.
The qualified bidder offering the lowest price will be selected as the first-ranked bidder for each project and will have 15 days to finalise a power purchase agreement with EPGE, after which the ministry will issue the letter of acceptance and announce the winner. Once the LOA is issued, the winning company will have just 180 days to commence generation.
The unusually rushed timeline – apparently so that the plants can come online in the 2021 hot season – is likely to have deterred more risk-sensitive bidders, particularly those that would have relied on traditional project finance.
The Chinese bidders are expected to dominate if they pass the technical criteria, multiple sources told Frontier.
They described the tender design as flawed because it gives no weighting to design, provided the bidder meets the technical criteria. The winning bidder will be selected from among qualified bidders based on price alone.
Whether the Chinese companies pass the technical criteria could depend on how strictly the tender selection committee applies a rule on previous experience as an independent power producer, because some of the Chinese bidders are not noted developers, instead being known for component manufacturing, and as engineering, procurement and construction contractors.
‘No one in that room had slept’
Even with the one-month extension, bidders endured a frantic rush to submit documents by the July 17 deadline.
When Mr Greg Kleiman arrived at the Ministry of Electricity and Energy that morning, he was running on empty.
An adviser to a Thai-Myanmar consortium, he had left Yangon the previous afternoon and arrived in Nay Pyi Taw around 8pm. Then followed four hours of sorting out documents, another four hours of copying documents to memory sticks, a few hours of sleep, and then a 6am start to seal boxes of documents. The paperwork for bids on four sites – one set of original documents, two copies for each – filled the back of his car.
But Kleiman wasn’t alone. “There were people still copying documents onto memory sticks inside the ministry at 9am,” he said. “I spoke to one person who had been up all night and finished at 8am … No one in that room had slept the night before.”
When proceedings opened at 10am, ministry staff began processing five bids at a time, checking for compliance against 14 criteria, and accepting the US$500,000 bid guarantee and the sealed bid price. “They worked tirelessly throughout the day,” he said.
By 8pm, when he received the final bit of paperwork, Kleiman was exhausted. “I hadn’t slept or eaten properly for a week,” he said.
“How could anyone have completed a bid in 30 days?” he asked, referring to the original timeline for the tender. “If they had given us 90 days to prepare, we would have bid on more.”