On May 25, the American, British and European chambers of commerce submitted a letter to the ministry highlighting their concerns and asking for an extension of the June 18 deadline to submit tender documents for the project. The Myanmar Times has seen extracts of the letter. 

The tender, issued on May 18, invites companies to bid for the construction of 30 ground-mounted solar plants capable of generating 1060MW of power in total under a 20-year build, operate and own basis. This accounts for a third of Myanmar’s dry-season generation capacity.

But the letter reflects the growing frustration at the way energy projects are tendered among local and foreign investors. “As the COVID-19 pandemic continues, potential foreign bidders and suppliers are not able to inspect the sites associated with this tender, nor are they in a position to prepare a thorough response to the tender,” the letter said. “For companies that are considering this opportunity with any kind of financing option, with local or foreign lenders, the current deadline of June 18 deadline is impossible to support.”

Some investors who are interested to bid have added that the deadline is unreasonable given the land documentation requirements.

A 90-day timeframe, at a minimum, better aligns with international practices under normal circumstances, the chambers say. But with the flight ban, quarantine measures for travellers and other COVID-19 constraints, they are asking for the tender to be extended by at least nine months.

Doing so, they argue, will help make the tender “a thorough, competitive, and fair bidding process”, which will in turn ensure more competitive pricing of Myanmar’s power generation and potential in attracting foreign investment.

Among the concerns raised are the fixed tariff inclusive of taxes over the entire concession period of 20 years and land speculation, since the ministry requires companies to submit evidence of land acquisition in their bids.

Clauses in the power purchase agreement should also be revised in order to make the project bankable, the business groups say. The tariff will be paid in the Myanmar currency, fixed for the whole 20-year period, with no guarantee provided for the offtake. 

Investment minister U Thaung Tun acknowledged that there has been a backlash to the hasty solar tender.

“We wanted to proceed with the 1000MW solar tender quickly, but we’re getting flagged for going ahead with it quite fast,” he said in a webinar organised by the Australia-Myanmar Chamber of Commerce on Friday (May 29).

Graphic: The Myanmar Times

AmCham president U Khin Maung Win told this newspaper that changing the timeline allows investors to better prepare their bids, provide the “best possible solutions” and conduct proper due diligence.

The European and US embassies have added their voices to those expressing their concerns.

The EU ambassador to Myanmar, Kristian Schmidt, has been following the tender process closely.

“EU companies have both an interest and expertise in this area, but we are concerned that the unusually short deadline may deprive Myanmar of receiving competitive, quality bids. We therefore encourage the authorities to carefully consider the concerns voiced by the various chambers of commerce,” said the EU Delegation’s spokesperson.

The US also encourages the government to consider revising the schedule, the US embassy spokesperson said, because a “quality competition takes access to information, and time to address barriers such as difficult land acquisition”.

“The country desperately needs more electricity but new supplies must also be affordable for the people. If the competition is transparent and fair, the electricity bill will be lower for everyday people,” added the spokesperson.

The ministry could not immediately be reached and did not reply to previous requests for comment.

Editor’s note: The story has been updated to include comments made by investment minister U Thaung Tun.

Source: https://www.mmtimes.com/news/pressure-grows-myanmar-delay-solar-tender.html