Power Grid Bangladesh PLC (Power Grid) has come under scrutiny after allowing EnergyPac Engineering Ltd., a contractor whose contracts were previously terminated over repeated failures, to participate in major international tenders through a joint venture despite an internal policy barring such firms for three years.

The controversy involves two transmission infrastructure packages worth more than Tk 800 crore under the Asian Development Bank (ADB)-financed Power Transmission Strengthening and Integration of Renewable Energy Project (PTSIREP). Package-2 is valued at US$51.88 million (approximately Tk 612.18 crore at an exchange rate of Tk 118 per US dollar), while Package-3 is worth US$16.96 million (over Tk 200 crore).

A formal complaint has been submitted to the Ministry of Power, Energy and Mineral Resources by China National Machinery Import and Export Corporation (CMC), one of the international bidders. The Chinese company alleges that Power Grid ignored its own board policy by permitting EnergyPac to re-enter the bidding process through a joint venture, despite the firm's previous contractual failures.

According to official documents, EnergyPac had three contracts terminated in 2025 after repeatedly failing to complete projects on schedule, causing significant delays and violating contractual obligations. Four additional projects under the company's responsibility remain delayed or only partially implemented, with repeated extensions of both project deadlines and costs.

Termination letters issued by Power Grid cited multiple contractual breaches, including failure to submit advance payment guarantees on time, inability to arrange the foreign currency component of advance payments, failure to obtain mandatory insurance coverage, minimal progress at several substations, suspension of work, and failure to resume construction despite formal notices. The contracts were cancelled under the General Conditions of Contract (GCC).

Board meeting records further show that Power Grid had adopted a policy declaring contractors whose contracts were terminated due to default ineligible to participate in its tenders for three years. Under that decision, EnergyPac should remain barred from bidding until 2028.

However, procurement documents reveal that the company later returned through a joint venture and was declared technically and financially responsive during the evaluation process. At least two contracts, including one previously cancelled, are now reportedly moving toward award in favor of the same contractor.

The disputed tenders involve turnkey construction of new 230/132/33 kV substations at Madhabpur and Monohardi, expansion of the Baizupur substation, and associated 230 kV and 132 kV transmission lines. Bidders were required to demonstrate successful completion of at least three similar projects over the past ten years, along with strong financial and technical qualifications.

In its complaint, CMC argues that Power Grid's board policy was specifically intended to prevent underperforming contractors from securing future projects, but that objective has been undermined by allowing EnergyPac to participate through a joint venture structure.

The complaint also warns that the issue could affect the credibility of internationally financed projects supported by the ADB, World Bank, Asian Infrastructure Investment Bank (AIIB) and Germany's KfW, potentially raising concerns among development partners over procurement integrity.

Power Grid Managing Director Abdur Rashid Khan confirmed that EnergyPac had been blacklisted. However, he said projects financed by development partners must strictly follow donor procurement guidelines. He added that Power Grid had requested a provision excluding previously terminated contractors, but donors responded that no such restriction exists under their procurement rules.