Tuesday, April 23, 2013

Gov’t slates auction for Naga power plant


Business World Online
Posted on April 23, 2013 11:21:41 PM

THE POWER Sector Assets and Liabilities Management Corp. (PSALM) will auction off the Naga power plant complex in Cebu in the second half of the year, the state firm’s top official said yesterday.

PSALM’s board directed the privatization of the Naga power plant after the Justice department cleared the “right-to-top” given to SPC Power Corp., which currently operates and maintains the plant. -- BW File Photo











“With clearance from its board of directors, PSALM will resume the sale of the 145.8-megawatt (MW) Naga Power Plant Complex (NPPC) in the second semester,” PSALM President Emmanuel R. Ledesma, Jr. said in an e-mail to reporters.
“The Board approval came after the Department of Justice rendered an opinion confirming that the ‘right-to-top’ provision included in PSALM’s bidding documents did not violate the rules on competitive bidding,” he added in a text message.
PSALM in October 2011 deferred the auction of the facility to give way to a probe, after a lawmaker complained that the “right-to-top” given to SPC Power Corp. -- which currently runs the power plant complex -- was disadvantageous to other bidders.

PSALM and National Power Corp. had entered into a land lease agreement with SPC, under which SPC was granted the “right-to-top” other firms’ bids for the Naga power plant complex.

This was questioned by House Deputy Speaker Lorenzo R. Tañada III (4th district, Quezon) as this would give SPC an “unfair advantage” over other firms.

PSALM is mandated by Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001, to handle the sale of remaining power assets and financial obligations of the National Power Corp.

Mr. Ledesma said PSALM will publish the invitation to bid (ITB) for the Naga power plant complex next month.

“We are finalizing the bid documents and will publish ITB definitely in May.”

He said the bidding will take place before SPC’s extended contract to operate and maintain the power facility expires in September.

“We already extended the OMSC (operation and maintenance service contract) of SPC in the meantime while preparing for the privatization, ” Mr. Ledesma said.

He added the extended OMSC would run for six months, or from March 26 to Sept. 25.

PSALM initially gave SPC a three-month contract extension until Dec. 25, which was extended anew until March 25.

The Naga power plant complex consists of thermal power plants. The 50-MW and 56.8-MW thermal plants use coal with a mixture of bunker oil as fuel, while the 38-MW plant is fueled by bunker oil and diesel.

Mr. Ledesma said that PSALM is planning to privatize five more power facilities this year.

These are: the 640-MW Unified Leyte geothermal power complex; 140-MW Casecnan multipurpose hydroelectric power plant; 145.8-MW Naga power complex; the 30.75-MW Benguet mini-hydro power plant; and 850-MW Sucat thermal power plant 225-MW Bataan thermal power plant. -- CAMCF  source

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