Siddhirganj Power Project, Credit No. 4508-BD
Implementation Review Mission: September 28 to October 2, 2014
Aide Memoire
1. An implementation review mission[1] of Siddhirganj Power Project was carried out during September 28 to October 2[2], 2014. The mission met with the officials of Ministry of Power, Energy and Mineral Resources, External Resources Division of the Ministry of Finance, Power Grid Company of Bangladesh (PGCB) Limited, Energy Generation Company of Bangladesh (EGCB) Limited, and Gas Transmission Company Limited (GTCL). Key officials met are listed in Annex-1. This aide memoire was discussed at a wrap-up meeting chaired by Mr. Monowar Islam, Secretary Power Division, Ministry of Power, Energy and Mineral Resources on October 19, 2014. At that time it was decided to classify this aide-memoire as a public document under the Bank’s Access to Information policy.
2. Mission Objectives
The objectives of the mission were to (i) review the implementation of the project specially the 335 MW combined cycle power plant (CCPP) towards achieving the project development objective (PDO); (ii) review project issues; and (iii) agree on the next steps. Specifically, the mission would review progress of the construction of the 335 MW CCPP, undertake site visit, track key dates of construction schedule and assess likelihood of achieving the commercial operations date (COD) of the Simple Cycle power plant on time. The mission would further review whether the project ratings should be considered for upgrading on current implementation progress and an extension of project deadline to enable PDO indicators to be monitored. The mission would further review the borrower’s additional financing plan in moving forward this high priority power generation project.
3. Key Project Data and Ratings
Project Data / Project Performance RatingsBoard Approval Date: / 10/30/2008 / Summary Ratings: / At MTR / Now
Effectiveness Date: / 03/31/2009 / Achievement of Project
Development Objectives (PDO) / MU / MU
Original Closing Date: / 03/31/2016
Revised Closing Date:
MTR Date / N/A
02/12/2014 / Implementation Progress (IP) / MU / MS
Original Credit Amount: / SDR 222.6 million
($350 million) / Other Ratings:
Financial Management / MS / MS
Amount Disbursed: / SDR 116.497 million
($173.085 million) / Project Management / S / S
Disbursement / 52.33% / Procurement / S / S
Performance Trend / Deteriorating / Improving
Notes: HS= Highly Satisfactory; S=Satisfactory; MS=Moderately Satisfactory; U=Unsatisfactory; MU=Moderately Unsatisfactory; HU=Highly Unsatisfactory; NA= Not Applicable
4. Achievement of Project Development Objective (PDO)
Increase supply of electricity to Bangladesh grid network: Since May 2014, there is an improved progress of the construction of the 335 MW CCPP and an overall steady progress of the project. The commercial operations date (COD scheduled for 13 February 2016) for the CCPP can be achieved within the project deadline (March 31, 2016), with the current trend of continued construction progress. However, the PDO can’t be achieved as the targeted energy (2.49 billion kWh per annum) can’t be delivered and monitored within the project deadline. The Project performance in terms of the PDO level result indicators is as follows (details given at Annex-2).
5. (a) PDO Indicator: Not met
2.49 billion kWh additional electricity delivered to grid (in peak and off-peak period): Not met. No energy generated yet as the CCPP is still being built.
(b) Intermediate Indicators: Partially met.
(i) 335 MW conventional power generation capacity, constructed under the project- Not yet built; presently under construction and 50% completed.
(ii) 11 km power transmission lines constructed under the project: Met. 11 km, 230 kV transmission line and two 600 MVA substations built and under load test.
(iii) 60 km gas supply line constructed under the project: Partially met. 85% of the contract completed; pre-commissioning of pipeline completed, upstream gas will flow in end-October 2014.
(iv) 218.6 billion MJ projected lifetime fuel saved: Not met. No fuel saved as the CCPP is still under construction and can’t burn fuel.
(v) O&M contracts budgeted and implemented: Partially met. The O&M for 2x120 MW peaking units of EGCB is contracted and operating the power plants. The second O&M for the 335 MW CCPP is under procurement. This O&M is expected to be onboard in March/April 2015.
(vi) ERP functional and generating reports: Not met. Two ERPs designed and selection of vendors is under process.
Based on the above results, there are notable improvements of performance against the Intermediate Indicators. Therefore, the IP rating has been upgraded to moderately satisfactory (MS). However, the project is not on track to deliver the PDO by end of the project closing date (March 31, 2016), therefore the PDO rating will remain moderately unsatisfactory (MU).
6. Implementation Review
The mission reviewed with the Government and the IAs (EGCB, GTCL and PGCB) the present implementation performance of the project and concluded that steady progress is being made in the construction of the 335 MW CCPP, the installation of the two small infrastructures (230 kV power evacuation system and 60 km 30 inch diameter gas transmission pipeline) and the implementation of the Technical Assistance component. Presently, 90% of the IDA funds have been committed; the rest ($28.50 million) covers outstanding institutional development support that is under procurement. The project has achieved 63% overall progress of physical infrastructure and the TA is providing steady institutional development support to the IAs. They are acquiring a wide range of utility improvement capabilities through this. The mission concluded that an extension of the project closing date by at-least one year would be required to be able to monitor and measure whether the integrated gas-to-power project would deliver the targeted 2.49 billion kWh per annum of energy to the grid (and thus achieve the PDO). However, additional progress (see Annex 3) would be needed before such an extension could be considered.
7. Progress of Physical Infrastructure
Physical and financial progress of the main project infrastructure works are given below:
Components: / At MTRPhysical Progress / At MTR
Financial Progress / Current
Physical Progress / Current
Financial Progress
(a) 335MW CCPP / 30% / 19.7% / 50% / 59%
(b) 230kV Power Evacuation System / 98% / 84% / 100% / 95%
(c) 60km Gas Transmission Pipeline / 75% / 60% / 85% / 65%
Overall Progress / 46% / 34.5% / 63% / 52.3%
The mission noted the above impressive progress and recognized that these are results of a few positive steps the Government and EGCB took during and after the mid-term review (MTR) of the project in January 2014[3]. The mission was informed that since then, Isolux has been responding to the contractual obligations, expanding volume of construction/erection activities and mobilizing increased resources to meet the construction schedule. An improved project monitoring, especially on the construction of CCPP, is in place. Isolux has been submitting informative monthly progress reports elaborating on all aspects of the EPC; Fichtner has started to forward monthly Owner’s Engineer’s report providing professional review on various project issues; and EGCB is holding monthly PIC (project implementation committee) meetings with all stakeholders and providing issue-wise updates and or decisions. The Power Division is holding PSC (project steering committee, chaired by Power Secretary) meetings periodically to review and resolve critical issues of the project.
The mission paid a visit to the CCPP construction site and observed an accelerated rate of construction and erection works. They were pleased to note an increasing activities being performed at the site and that several construction/heavy erection activities were ongoing at the same time. The gas turbine and gas turbine generator have been placed onto the GT pedestal and they were in the process of assembling. This is a major milestone of the CCPP construction works. The storage needs of the CCPP have exceeded the available storage capacity impeding progress of the erection works. However, Isolux has been found coordinating the various activities efficiently and mobilizing various resources effectively to catch up the schedule.
The other two small infrastructure components of the project have also made steady progress; PGCB’s power evacuation system is 100% complete and is on load test at 132 kV since several months. GTCL has so far completed 85% of the gas line contract, completed the hydro test and waiting for nitrogen supply to neutralize the pipe prior to the Gas-In. The Upstream gas is expected to be available in the Pipeline around October 31. GTCL confirmed that they target to provide metered and regulated gas from the Siddhirganj gas RMS to the CCPP in March 2015. This coincides with the commissioning gas flow schedule of the CCPP. The mission noted that Isolux has started some preparatory works to connect the Siddgirganj RMS.
The mission informed that a few critical activities identified in July 2014 as benchmarks for upgrading of the project rating have been met (for example, monthly actual construction progress rating of CCPP (5%) crossed the monthly average of 3.3%; soil consolidation works completed; more than 90% of piling works completed; more than 30% of concreting completed; GT and GTG have been placed onto the GT pedestal and are in process of assembling etc.). Consequently the IP rating has been upgraded from MU to MS (see para 5). The mission is of the opinion that the project implementation is back on track and the current implementation performance trend is expected to continue.
8. Progress of Institutional Components
The institutional development supports (Part: D Technical Assistance) have been making good progress. Three Owner’s Engineers are providing technical, supervision and contract/project management advice to the IAs and NTPC is providing O&M services to EGCB’s 2x120 MW Siddhirganj peaking units (37% of contracted man-months achieved). Procurement of the rest three large contracts (an ERP for each of EGCB and GTCL; and an O&M for 335 MW CCPP for EGCB) is progressing well. These consultants are scheduled to be onboard by March/April 2015, well in time to interface with commissioning of the Simple Cycle Power plant.
The other institutional progress includes the establishment of an Environment and Social Units (ESU) in the IAs, to build the relevant capacity. EGCB Board has approved an organogram for EGCB’s ESU, which includes 4 positions for Environmental, Health and Safety (EHS) Unit with 1 Deputy General Manager, 1 Manager, 1 Deputy Manager and 1 Assistant Manager. The organogram is waiting for final approval of Power Division. The mission recommends revisiting the organogram to keep provision of Laboratory Staff under the EHS for smooth monitoring of the environmental parameters agreed in the Environmental Management Plan (EMP) under the Environment Impact Assessment (EIA). On the other hand, PGCB delayed in finalizing the organogram for ESU. This has been prepared and approved by the PGCB Board in the mission. The organogram includes 5 positions, 1 Deputy General Manager (Environment and Social) to lead the Unit, 1 Manager (Environment), 1 Manager (Social/Resettlement) and two Deputy Managers, one for each discipline. PGCB agreed to complete the selection of ESU positions by January 31, 2015.
With the help of the TA, all the agencies have made good progress in acquiring a range of institutional capabilities including in contract design and procurement, environmental and social impact assessment and management action plans, financial management, construction supervision and project management, and enterprise resource planning and management. The mission informed the IAs about the scope of training, support for analytical work, and creation of social facilities (EGCB only) included in the project restructuring in April 2014 and encouraged them to utilize these resources. The mission elaborated that the Training will finance reasonable costs of training, seminars, workshops, conferences and study tours conducted locally or abroad, and will cover fees, local/international travel, lodging and subsistence for both trainers and trainees, rental of facilities, and training materials.
9. Project Issues
The mission looked at the critical path of the integrated gas-to-power project construction schedule and suggested EGCB to adhere to this rigorously to achieve the Simple Cycle Commissioning and Simple Cycle PAC (provisional acceptance certificate), scheduled for May 30, 2015. All the Steam Cycle construction works should go in parallel and as per schedule.
CCPP Construction Schedule and Recovery Strategy: Isolux has been following the revised construction schedule[4] discussed in the 3rd Project Steering Committee (PSC) meeting on February 12, 2014. The mission noted 47 day delay in this schedule. The Power Secretary confirmed that there is no scope for rescheduling and any delay should be recorded. In the wrap-up meeting he categorically requested Isolux to recover the lost days because there will be an increased need for electricity in the irrigation season in April 2015. The mission suggested that Isolux should not slide or revise the total schedule every month rather show the exact status of each activity. Fichtner in July opined that the revised construction schedule is optimistic and has limited floats for time recovery. However, the mission advised that based on an improved construction management (based on an effective coordination (both within utility and inter-utility) and continued increased construction trend) the lost days could be recovered. Fichtner should proactively track the lost days on weekly basis and guide Isolux and EGCB accordingly.
Simple Cycle Installation and Commissioning Plan: The purpose of this Plan is to regularly track the scheduled activities; identify activities behind schedule; and take timely steps or corrective measures to accelerate the work for achieving the SC PAC. The mission explained to EGCB, Fichtner and Isolux the crucial need of the Plan and that without the Plan, the CCPP construction may face an unanticipated deficiency that can jeopardize the commissioning of the SC as well the PAC. The mission emphasized that the Plan does not only track the scheduled activities or milestones, but it incorporates factors that can affect construction of the CCPP and Fichtner’s views on how to address them. The methodology for preparation of the Plan includes Fichtner’s professional review of the following factors and recommendations to catch up the schedule and achieve the quality:
i) Present construction trend, its state of affairs, and EPC’s preparedness to achieve the schedule and quality,
ii) EPC materials on site and shipping schedule,
iii) Availability of construction tools, tackles/equipment; and scheduled deployment to site,