Mitsubishi-Transfield's sole-bidder status for the Collie power station project was withdrawn by SECWA's board of commissioners today.
Commissioner Norm White said the Mitsubishi-Transfield consortium had failed to meet cost targets and timetable milestones which had been agreed between the parties.
Fuel and Energy Minister Geoff Gallop said SECWA's decision would enable Asea Brown Boveri to re-enter the bidding for the Collie power station.
Mitsubishi-Transfield had been invited to continue as a competitor for the project.
"The Government remains committed to its decision to proceed with a privately built, owned and operated coal-fired power station at Collie, as long as it remains commercially attractive," Dr Gallop said.
"The Government's and SECWA's prime and continuing objective is the cheapest possible tariff from the new power station.
"We are looking to coal to provide the State with secure, long-term energy supplies at the lowest possible tariff well into the next century."
Dr Gallop said Asea Brown Boveri had indicated its willingness to submit a revised bid for the project. The way was now clear for SECWA to enter into detailed discussions to establish the ABB position as soon as possible.