PSALM urged to review bidding TOR for Power Barges 101 to 104

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MONDAY, 18 JUNE 2012 21:05 PAUL ANTHONY A. ISLA / REPORTER

THE Department of Energy (DOE) has asked the Power Sector Assets and Liabilities Management Corp. (PSALM) to revisit the terms of reference for the bidding of Power Barges (PB) 101 to 104 to attract more bidders.

Energy Secretary Jose Rene Almendras told reporters he has bigger concerns on the reason behind the bidders’ decision not to bid for the barges, which among others,  is their reluctance to move the barges to Mindanao. He said some of the bidders are afraid to go to Mindanao, and they rather not get involve in Mindanao.

However, he reiterated that the provision on moving the barges to Mindanao will remain a condition to the bidding of the power barges.

“I think the price will be affected because of that consideration. We’ll have to make it more attractive to convince them to move in Mindanao. The mooring sites and the transmission for the mooring sites will not be a problem,” Almendras said.

Potential investor groups earlier expressed concern over the opposition of Mindanao-based consumers over the possible increase in power rates due to the privatization of Power Barges 101 to 104.

Industry sources said the prospective bidders are concerned that Mindanao consumers will not support a generation rate that will make the operation of the barges viable, given the experience with Therma Marine’s barges.

On top of operational costs, the sources pointed out that the winning bidder is also required to shoulder the cost of transfer of the barges and repair of mooring sites.

They added that the winning bidder or bidders cannot assure the immediate transfer of the power barges to Mindanao.

The sources added that there is a considerable work to undertake prior to transfer like repair/expansion of mooring facilities, construction of transmission lines and the required government approvals and permits to transfer and operate the barges.

They added that bidders are wary of indeterminate costs imposed by local governments.

“Some bidders were put off by the cost of repairs that were required to be shouldered by the winning bidder under the provisions of the sale contracts. And some bidders felt they needed more time to study the assets and the requirements to operate them,” the source said.

Emmanuel Ledesma Jr., PSALM president, said they will reschedule the bidding of the power barge in the early second half of the year or by mid-September.

PSALM earlier declared the bidding for Power Barge 101 to 104 a failure after only one of the seven qualified bidders submitted an offer for the assets.

PSALM said ACTA Power, a joint venture between the power companies of Ayala Corp.’s AC Energy Holdings and Phinma’s Trans-Asia Oil and Energy Development Corp., submitted the required bidding documents prior to the expiration of the bid submission deadline at 12 noon.

PSALM, in accordance with its bidding procedures, declares a failure of bidding when less than two bidders participate in the exercise.

Ledesma said the conduct of a second round of bidding for the power barges will be taken up with the PSALM board of directors for the latter’s instructions.

Up for bidding include Package 1, which combines PBs 101 and 102; Package 2, consists of PB 103; and Package 3, which covers PB 104. He said a bidder can win any or all the packages.

Commissioned in 1981, PB 101 and 102 are stationed at Bo. Obrero in Iloilo City. PB 103 and 104, which began operation in 1985, are moored in Botongon, Estancia, Iloilo and at the Holcim Compound, Ilang, Davao City, respectively. Each power barge has an installed capacity of 32 megawatts.    source