Power Sector Assets and Liabilities Management Corp. said Thursday it will resolve the “right of first refusal” of SPC Power Corp. over the Naga power plant complex in Cebu whose supply contract is up for bidding in October.
Industry sources said SPC Power owned a right of first refusal under a land lease agreement with PSALM when the company bought the land-based gas turbines in 2009.
“PSALM will have to resolve how to go about this concern before proceeding with the bidding,” a source said.
SPC Power bought the 55-megawatt Naga power plant from the government for $1.1 million in 2009.
Sources said the move is expected to raise the price of the Naga complex power contracts.
PSALM president Emmanuel Ledesma Jr., however, denied the existence of a right of first refusal in favor of SPC Power.
“There is no right of first refusal. Perhaps it would do well for all concerned to await the final structure of the transaction,” he said.
The Naga power plant complex consists of the 106.8-megawatt Naga Coal Thermal Power Plants 1 and 2 and the 39-MW Naga Diesel Power Plant in Naga, Cebu. The plants are covered by a rehabilitate-operate-maintain-and-manage/energy conversion agreement with Kepco-SPC, a joint venture betweek Korea Electric Power Corp. and SPC Power, which is set to expire in March 2012.
Ledesma said PSALM decided to start the tendering process for the Naga independent power producer administrator this month. The first round of bidding for the Naga IPPA was deferred on October 18, 2010 after the new PSALM board sought to review previous privatization activities. All bidding activities for the Naga IPPA had been completed prior to the deferment, except the actual bidding.
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