Wednesday, August 8, 2012

Napocor postpones anew bidding for P2.6-B Agus plant upgrade


By Neil Jerome C. Morales (The Philippine Star) Updated August 08, 2012 12:00 AM 


MANILA, Philippines - The National Power Corp. (Napocor) has postponed anew the bidding for the P2.6-billion upgrade of a key hydropower plant in Mindanao as the bidders sought for government guarantee for the financing of the contract.
Bidding for the uprating of the Agus 6 (Units 1 and 2) hydropower plant in Lanao de Norte was moved from Aug. 6 to an indefinite date, a Napocor official said.
“We are still waiting the approval of the National Economic and Development Authority (NEDA) because the bidders are apprehensive due to large financing,” a source said in a phone interview.
The bidders, foreign engineering firms Weir Plc, Andritz Group and Guangxi Construction Engineering Group, want government guarantee for the upgrade’s cost, the official said.
Under the auction’s rules, the winning bidder will shoulder the financing for the upgrade of Agus 6, hindering the firms’ cash flow.
Napocor subsidiary Power Sector Assets and Liabilities Management Corp. (PSALM) will start paying the winning contractor only six months after the hydropower plant restarts operations, which is in the next three years.
The source said PSALM requested to the NEDA that its internal cash be made available to winning bidders.
In March, Napocor announced that the upgrade of the Agus 6 hydroelectric plant will start in June. However, the first bidding was set on July 6, which was pushed back to Aug. 6.
Approved budget for the contract is P2.598 billion. The power plant’s capacity will increased to 69 megawatts (MW) or 34.5 MW per unit. To date, Units 1 and 2, which were commissioned in 1953, are generating only 20 MW each from its 25 MW capacity.
“When the financing scheme is okay, we will advertise again because many bidders might become interested,” the source said.
The 30-month long upgrade will increase the generation capacity of the power plant and extend the units’ operation life for a minimum of 30 years.
In September 2011, NEDA approved the upgrade plan for Agus 6. The project was subject to two failed competitive biddings in 2008. The newest of the Agus power plant is Agus 1, which went online in 1992.
The upgrade is also seen as a solution to the power crisis in electricity-starved Mindanao, which suffered from two to four hours of rotating brownouts early this year due to supply shortage.     source

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