Officials dispute scheduling fears at Laibin B plant
Chinese officials have dismissed project developer concerns over a tight completion schedule for the Laibin B power plant, which has just opened for bids.
Wang Yaguang , an official with the State Planning Commission's Bridge of Trust consultancy, yesterday said each bidder for the US$600 million to $700 million plant in Guangxi province could come up with its own completion schedule.
Laibin B, which comprises two 350 megawatt units, is China's first attempt at financing a build-operate-transfer power plant without central government guarantees. The winning foreign developer will operate the plant for 15 years before handing it over to the regional government.
Of the 12 consortiums shortlisted by Beijing in October last year, only six submitted proposals on Tuesday.
'They can set their own timetables [for financing and construction],' Mr Wang said.
He added that those consortiums which could complete the plant quickly would have a better chance of winning the bid. 'One of our biggest concerns is the ability of the bidders to raise capital and reach financial closing,' he said.
The six bidders - China Light & Power Co, Electricite de France, New World Infrastructure, Tomen, InterGen and National Power - will have to hand over a $10 million bid bond.
The winner will pay an additional $30 million performance bond after it signs the contract to back up its commitment to complete the project according to schedule.
Mr Wang said Bridge of Trust's evaluation committee would narrow the pool to three candidates within the next two months. He expected a final decision within three months if all goes smoothly.
'The government is very satisfied. They never thought that there would be so many bidders,' he said.
John Mitchell, a project finance expert at Price Waterhouse, said China would place strong importance on both price and the bidder's technical ability when evaluating the proposals.
He said Laibin's pioneering role in Chinese limited recourse project finance meant prospective bidders had more on their minds than just the rate of return.
'Some companies are in this for the prestige as well as the returns,' he said.