Power Division orders RNPL to cancel coal supply tender for Pathuakhali power plant over irregularities
Power Division also orders to reduce future coal supply contracts from five years to two
The Power Division has directed RPCL-NORINCO International Power Limited (RNPL), operator of the 1,320-megawatt Patuakhali ultra-supercritical coal-fired power plant, to cancel its tender for appointing a coal supplier for a five-year contract.
The division also instructed the operator to take steps to float a fresh tender at the earliest possible time and to reduce future coal supply contracts from five years to two following the cancellation.
The directive, issued on 7 August, came after a probe committee uncovered irregularities in both the technical and financial evaluations of the bidding process.
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In its cancellation order, the Power Division said: "To procure coal for the 1,320-megawatt Patuakhali plant, a tender was invited on 2 February 2025. Due to irregularities and flaws in both the technical and financial evaluation processes, this tender process should be cancelled."
The order was communicated to the RNPL, the chairman of the Bangladesh Power Development Board (BPDB), and the personal secretaries of the power and energy adviser and the power secretary.
Md Rezaul Karim, BPDB chairman, told The Business Standard, "If the coal supplier appointment process is not competitive, it will inflate coal prices and ultimately drive up the cost of electricity."
He added, "Shorter tenders allow small suppliers to compete, whereas five-year contracts impose tougher financial and operational requirements that discourage capable smaller bidders."
The cancellation order follows a probe committee report which uncovered restrictive tender terms and technical specifications that "favoured a single bidder", Singapore-based Yongtai Energy Pte Ltd.
The probe was launched after an 11 July 2025 report in The Business Standard titled "How tender rules and a lone bidder stall a $2.5b power plant," which highlighted sudden coal price changes, specific mine requirements, and supply commitments designed to benefit Yongtai.
RPCL-NORINCO had floated three tenders since January 2024 for a five-year coal supply contract. Each time, Yongtai emerged as the sole qualified bidder for the procurement of 1.3-4 million tonnes, valued between $50 million and $150 million.
Yongtai Energy also emerged as a qualified bidder when RPCL-NORINCO called for the procurement of 1 million tonnes of coal for the test run of the power plant.
The Power Division, in its letter, said technical specifications – including calorific value, ash fusion temperature, and coal size – should ensure an equitable bidding environment rather than benefit a particular supplier.
To ensure transparency and equal opportunity for future participants, the Power Division instructed RNPL to make sure that the future tender process be "fair, non-restrictive, neutral, and competitive" for all future prospective bidders.
A Power Division official said, "These measures are part of a broader effort to enhance transparency and fairness in the procurement process for one of the country's largest coal-fired power projects."
When TBS called Xu Bin, managing director of Yongtai Energy Pte Ltd, for a comment on the development, he used abusive language and then cut off the conversation.
