‘Amazing coincidence’ in bidding for Prai power plant

A business weekly has questioned an “amazing coincidence” in the bidding for the Prai combined cycle gas turbine power plant.

The Edge (30 July) noted that an online industry news site had revealed that Tanjung group, owned by 1Malaysia Development Berhad (1MDB) had edged out Tenaga Nasional by a razor-thin margin.

The bids:
Tanjong group (owned by 1MDB) – 34.6 sen per unit
Tenaga Nasional – 34.7 sen per unit
Others bids ranged from 35.9 sen to 39.4 sen

How did the bids turn out so close – a difference of just 0.1 sen? The Edge describes the difference as an “amazing coincidence”. Really?

This is an excerpt of another Edge report reproduced on the Power Engineering website:

It could simply be a matter of coincidence but it is very rare in an open tender process for the bids to come in that close. This naturally invites questions as to how exactly this situation could have arisen, says an industry official.

The official says that at the onset, most people within the industry roughly knew the numbers that Tenaga were working on and were looking at benchmarking their proposals close to or better than Tenaga.

This was because Tenaga was considered the front-runner for the project as it already had a presence in Prai, and because the new power plant is to be located on land belonging to the national energy provider. Tenaga’s executives were up the whole of Sunday and went on until early Monday morning before they decided on a price. So, there was not much room for others to know where exactly they stood, says an executive.

An executive close to the EC says that the tenders were opened in the presence of all and that the parties involved were made to sign a confidentiality agreement. Pendekar is a unit of Powertek Bhd, whose parent company, Tanjong Energy Holdings, was recently bought over by 1MDB.