Yongtai Energy’s rejoinder and our reply

Yongtai Energy Pte Ltd has issued a rejoinder and demanded an immediate retraction of a report published by The Business Standard on 11 July, titled "How tender rules and a lone bidder stall a $2.5b power plant", calling the article factually incorrect, misleading, and damaging to its reputation.

In the rejoinder, the Singapore-based energy company claimed the report violated journalistic norms by failing to seek comment from Yongtai or other relevant parties. The company alleged that the article contained serious factual inaccuracies and misrepresented its role in the coal supply tender for the RPCL-Norinco International Power Ltd (RNPL) project.

Following is the rejoinder issued by the company: 

Allegations regarding tendering process

The article (report) criticises RPCL-Norinco International Power Ltd (RNPL)'s adoption of a "single-stage two-envelope" procurement method, insinuating it was restrictive and exclusionary. This is incorrect and misleading. Yongtai argued that this method is an internationally accepted procurement standard, in line with Bangladesh Public Procurement Authority (BPPA) guidelines and used by agencies such as BPDB, NESCO, BCIC and BREB. The method, it said, was introduced in November 2022, well before the latest tender involving Yongtai.

How tender rules and a lone bidder stall a $2.5b power plant

Coal supply commitment letter 

The article also questioned a requirement for a coal mine owner's commitment letter, which the company defended as standard industry practice. "This ensures supply security and quality," the company stated, noting that none of the other bidders sought extensions or raised concerns about this requirement.

Coal index change

Yongtai further denied benefiting from a shift in the coal pricing index from ICI3 to HBA2, which the article implied tilted the process in its favour. The company said the change was the result of an Indonesian government decision, formally notified by RNPL to BPDB in March and later approved by the Power Division. "In fact, Yongtai opposed the switch, citing transparency concerns," the letter said.

Tender specification adjustments

Yongtai strongly rejected allegations that tender conditions were tailored to suit it. According to the rejoinder, RNPL relaxed several criteria across four rounds of bidding – including reducing coal reserve requirements and allowing joint ventures – to encourage wider participation. Despite these, only four bidders submitted proposals, and Yongtai was the only one to meet technical compliance after a review process involving seven committee meetings.

It also dismissed as baseless a quote from an unnamed RNPL official who suggested other participants were "dummy bidders." Yongtai insisted that all four bidders were actively involved and submitted clarification letters.

Mischaracterization of pricing and market position

The company took issue with suggestions that its bid price would drive up national electricity tariffs, saying its quoted price was deemed reasonable in official evaluations. It emphasized that tariff structures depend on various inputs beyond coal pricing, including financing costs and plant efficiency.

Unfounded claims of favouritism

Finally, Yongtai refuted what it called "unfounded claims of favouritism," stressing that it was not awarded the contract despite qualifying in three separate rounds. The company also rejected the article's implication that it was responsible for delaying the project's commercial operations, calling the claim legally and factually inaccurate.

Our reply 

The Business Standard reaffirms the accuracy and public interest value of its reporting. The report was based on thorough interviews with officials from the Power Division, BPDB, and RNPL, and focused on how the tender design potentially excluded competition, leaving Yongtai as the sole technically qualified bidder.

Our report clearly stated that two tender methods exist: single-stage two-envelope and two-stage two-envelope. The two-stage method, used in similar projects like Rampal and Matarbari, allows bidders to rectify documentation issues in the second stage – making the process more competitive. RNPL's use of the more restrictive single-stage method was noted for contrast and context. It is not "malicious," but a factual comparison highlighting deviation from precedent.

Yongtai was indeed the only bidder to meet the mine owner's commitment letter requirement – not only in the current tender but in all three previous attempts. As we reported, such letters are typically required after technical qualification, not before, as seen in Rampal and Matarbari. Bukit Asam's conditional letters disqualified others, while Yongtai's unconditional letter – enabled by a pre-existing commercial relationship – ensured its solo compliance. These facts were verified with multiple officials.

Yongtai claims to have "verbally opposed" the index change from ICI3 to HBA2. However, verbal objections hold no procedural value in formal tenders. No written objection from Yongtai was submitted. Meanwhile, RNPL changed the index unilaterally and gave bidders only 14 days to respond. Three bidders failed to adjust their prices accordingly and were disqualified. Multiple officials confirmed to TBS that Yongtai was aware of this change in advance.

Officials from the Power Division and RNPL told TBS that tender specifications were softened in the third round, but not significantly enough to open the process. Despite hundreds of coal mines in Indonesia, the technical criteria seemed to align only with Bukit Asam – Yongtai's partner. Officials noted that other bidders viewed the tender as "already lost" and refrained from further attempts, explaining why Yongtai alone remained qualified.

Yongtai's claim that their price was reasonable is contradicted by internal discussions at RNPL, where board members debated whether to award the contract while urging the bidder (Yongtai) to reduce its coal price. The RNPL Managing Director acknowledged this to TBS. Such renegotiation mid-evaluation breaches public procurement protocols and raises serious concerns over tender integrity.

Yongtai's assertion that other bidders actively participated is not supported by documentation. Most failed to submit critical requirements, including coal supply experience, mine commitment letters, and technical specifications. TBS contacted all four bidders for comment – none responded.

Our report pointed to restrictive tender design and high pricing – not Yongtai alone – as the reasons for the delayed commercial operation of the 1,320MW Patuakhali power plant. Despite three rounds of bidding, Yongtai emerged as the lone qualified bidder each time, which raises legitimate questions about whether the specifications favoured one player.

TBS finds it notable that RNPL – being the tendering authority – has not issued any objection to the report. Instead, Yongtai, a technically qualified bidder and not yet an awarded supplier, has taken the initiative to respond at length.

Probe body formed following the report

Soon after publication, the Power Division formed an inquiry committee based on the TBS report, investigating potential favouritism in the tender structure. This reflects both the credibility and impact of our reporting.

The Business Standard stands by its report, which was based on verifiable facts and multiple official sources. The rejoinder by Yongtai neither disproves the facts presented nor explains away the broader concern: a repeatedly failed tender process that has left a major national power project in limbo.