India Set to Beat China in Bangla Power Deal

India Set to Beat China in Bangla Power DealIndia Set to Beat China in Bangla Power Deal

A state-run Indian firm is poised to seal a contract to build a $1.6 billion power plant in Bangladesh, beating out a Chinese competitor in the latest commercial tussle between the region's two dominant powers.

After China's recent success in pushing development projects in Sri Lanka, a breakthrough in Bangladesh would be welcome news for Indian officials who have long fretted over Beijing's encroachment on to territory it considers its own backyard, Reuters reported.

India believes Bangladesh is a part of a "String of Pearls" China is building across the Indian Ocean that stretches from Gwadar Port in Pakistan to Djibouti on the African coast where it is building a naval base. After years of negotiations, India's Bharat Heavy Electricals will sign a contract to build a 1,320-megawatt thermal power station in Khulna in southern Bangladesh on Feb. 28, officials in New Delhi and Dhaka said.

China's Harbin Electric International Company, which has power projects in Iran, Turkey and Indonesia among others, lost the bid on technical grounds, said a Bangladesh official, speaking on condition of anonymity.

But 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.

India and China have stepped up bids for infrastructure projects in the region in recent years, with Indian Prime Minister Narendra Modi pushing for a greater engagement with smaller neighbors after years of neglect.

The loss of the power project is the second setback for China, after Japan muscled into Bangladesh's port sector last year, offering 80% financing on easy terms for a seaport, barely 25 kilometers from an $8 billion deepwater port that Beijing was negotiating to construct. Nearly two-fifths of Bangladesh's 160 million people do not have access to electricity, according to the World Bank.