By Lenie Lectura - February 3, 2020
THE Power Sector Assets and
Liabilities Management (PSALM) Corp. has started soliciting bid invites
for the privatization of the 650-megawatt (MW) Malaya Thermal Power Plant
(MTPP).
“PSALM is ready to commence its
third round of public bidding for the 650-megawatt Malaya Thermal Power
Plant and its underlying land located at Brgy. Malaya, Pililla, Rizal,” the
state firm said.
PSALM started today the publication
of its “invitation to bid” encouraging interested parties to participate in its
bidding activities February 3 until March 12 this year. Only parties who
submitted Letters of Interest and who have been issued PSALM’s Bidding Package
will be allowed to participate in the privatization of the assets.
A pre-bid conference is scheduled on
February 13 at 2 p.m. to solicit any comments and concerns that interested
bidders may have relative to the bidding requirements and asset sale
provisions.
The bid opening is set on April 15,
2020.
Interested bidders must address
their bids to the PSALM Bids and Awards Committee (PBAC) chairman and send
these to PSALM’s office in Quezon City.
PSALM is determined to privatize the
asset, which is sold on an “as-is-where-is” basis, by taking steps to adjust
the minimum bid price. It has also conducted valuation studies on MTPP and its
underlying land in determining the reserve bid price.
Meantime, PSALM awaits a
“positive response” from the Commission on Audit (COA) in relation to its
request to lower the P4.48-billion minimum bid price (MBP) of the MTPP.
“We are awaiting COA’s response to
PSALM’s request for approval of a discounting mechanism that will allow PSALM
to lower the MBP of the MTPP. To make this public bidding attractive to
bidders, we need to find an acceptable way of reducing the MBP by at least 20
percent,” said PSALM President Irene Besido-Garcia in a text message.
Garcia said the cost to operate the
plant, which is already way past its commercial life, is P400 million to P500
million. The amount includes fuel, real property taxes, among others.
“Hopefully, we would be allowed to subtract that amount from the MBP. We can
never really tell how much amount the market is willing to pay so we need to
keep on trying,” the PSALM official said.
PSALM declared a failure of the
second round of public bidding because there was only one bid. Following
bidding rules, PSALM then went through the process of negotiated sale with the
lone bidder, DM Wenceslao.
However, DM Wenceslao’s bid offer
was below the MBP. Thus, PSALM was constrained to also declare a failure
of the negotiated sale.
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