The Shenzhen municipal government is considering re-opening a tender for shares in Shenzhen Energy Group and raising the stake offered from 25 per cent to 40 following disappointing bidding interest, industry sources say. If the government went ahead, the current round of bidding would cease, and a new round opened to all potential bidders. It is understood China's largest independent power producer Huaneng Power International and government-backed China Resources Power are the only two companies to make bids. They were among more than 10 companies which signed non-binding letters of intent to bid. They included Huaneng, China Resources, Beijing Datang Power Generation, Hong Kong-listed property firm Goldwiz Holdings, Electricite de France, United States-backed Meiya Power, Cheung Kong Infrastructure Holdings and CLP Holdings. When the letters of intent were signed, the Shenzhen government indicated that 49 per cent would be offered for sale. However when a formal notice was issued inviting interested parties to bid, only 25 per cent was offered. The sources said the smaller-than-expected stake had turned off many potential bidders as they wanted to have a greater influence on Shenzhen Energy, which would allow them to learn about the mainland market and pave the way for further investments. The reduction has also resulted in the two bidders attaching to their bids more demanding conditions which would give them greater management influence than a 25 per cent stake would usually give them. The bids and conditions attached to them by the two bidders were not considered attractive enough, resulting in the government deciding to consider re-opening the offer. With installed capacity of 3,080 megawatts, Shenzhen Energy controls several power plants, including Mawan General Power Plant, Shajiao B Power Plant, Nanshan Thermal Power Plant and Shenzhen West Power Plant. It also owns significant stakes in two A-share power firms. The company controls 77 per cent of Shenzhen's power market and is the largest of the city's five state enterprises put up for grabs by foreign investors. An industry source said that for potential bidders, a key consideration was the appeal of investing in gas-fired power plants in Guangdong. 'The future of Shenzhen Energy is the gas business, because Guangdong has banned the construction of coal-fired power plants,' he said. He added Beijing was still wrangling with power producers interested in building gas-fired plants about the price of gas to be bought and electricity to be sold. Guangdong's recent electricity tariff reductions also aroused concern. China National Offshore Oil is building a liquified natural gas receiving terminal in Shenzhen for the re-gasification of imported gas to supply the power plants to be built.