BHEL beats Chinese in third-country projects

Public secotr Bharat Heavy Electricals Ltd (BHEL) is about to seal a contract to build a $1.6 billion power plant in Khulna in Bangladesh, beating Chinese competition in the bid. India believes Bangladesh is a part of a "String of Pearls" China is building across the Indian Ocean to the detriment of this country. The Chinse necklace stretches from Gwadar port in Pakistan to Djibouti on the African coast where it is building a naval base. After years of negotiations, BHEL will sign a contract to build a 1,320-megawatt (MW) thermal power station in Khulna in southern Bangladesh on February 28, officials in New Delhi and Dhaka said. China's Harbin Electric International Company Ltd, which has power projects in Iran, Turkey and Indonesia, among others, lost the bid on technical grounds, said a Bangladesh official. Anwarul Azim, a spokesman for the Bangladesh-India Friendship Power Company Limited, a joint venture set up to build the coal-fired plant, said BHEL was the lowest bidder. The Indian government's external lending arm, the Exim Bank, has backed up BHEL's offer with nearly 70 percent funding of the project at a soft interest rate of around 1% above Libor, the leading global benchmark for pricing transactions, an Indian government official said. It would be the biggest foreign project by an Indian public sector firm, eclipsing a plant already built in Rwanda and a planned one in Sri Lanka.