Chinese Company Debarred by World Bank Wins Bid for Yangon Power Plant

By Zaw Zaw Htwe 25 October 2019

YANGON—Chinese state-owned enterprise Energy Engineering Company has won a contract with the Myanmar Ministry of Energy and Electricity (MOEE) to build a 150-megawatt (MW) gas-fired power plant in Yangon’s Ahlone Township. The state-owned company was barred from World Bank projects in September for falsifying documents in its bid for an electricity tender in Zambia.

On Oct. 23, the MOEE announced the winners of the tenders for five electricity projects aimed at meeting the anticipated increase in electricity demand in summer 2020. The five electricity projects are expected to produce a total of 1,070 MW.

China Energy Engineering Group-Hunan Electric Power Design Institute Company (CEEC-PHEDI) won the tender to build the gas-fired power plant. The consortium includes Shenzhen Shennan Power Gas Turbine Engineering Technique Co and China ITS (Holding) Co. 

The MOEE said they awarded the tender for the project on Sept. 3 and the group has already begun implementing the project.

The World Bank announced on Sept. 11 that CEEC-PHEDI would be debarred from World Bank-financed projects for 20 months for committing fraud in its bid to build the Lusaka Transmission and Distribution Rehabilitation Project in Zambia.

The Word Bank said in a statement that the Chinese state-owned enterprise “knowingly and fraudulently falsified documentation describing past contract experience, litigation history and business credentials” to meet the requirements for bidding on the project. The project was aimed at increasing the capacity and improving the reliability of electricity transmission and distribution in Lusaka, Zambia.

According to a press release from the Word Bank, the company has committed to “developing an integrity compliance program consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines.” 

The company also committed to fully cooperating with the World Bank Group Integrity Vice Presidency.

Despite the World Bank debarment, the company can still implement some projects in Myanmar, according to an officer from the World Bank Myanmar.

”The World Bank operates on a case-by-case basis so the sanctions will not affect the company in Myanmar, but the reputation of the company has suffered,’’ said he.

When asked for comment, MOEE spokesperson and Deputy Permanent Secretary U Soe Myint referred The Irrawaddy to MOEE Managing Director U Than Naing Oo but he was unavailable for comment on Friday.

In June 2019, the MOEE opened tenders to international companies for five independent power producer and build-operate-own (IPP/BOO) electricity projects with a target capacity of 1,040 MW.

A consortium including VPower Group Holdings Co. and VPower Holding Company was awarded the tender for the Kyun Chaung Power Producing Project on Oct. 6.

A consortium including China National Technical Import and Export Corporation, VPower Group Holding Co. and VPower Holding was granted the tender for the Kyaukphyu Electrical Producing Projects, which are slated to produce 150 MW. The group also won the tenders for the 350-MW Thanlyin Power Plant and the 400-MW Tharketa Electricity Production project.

The World Bank has provided the Myanmar government with US$400 million in financing for national electrification projects.

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