Business World Online
Posted on July 12, 2011 11:04:28 PM
BY EMILIA NARNI J. DAVID, Reporter
THE 140-MEGAWATT (MW) Naga power plant complex, one of the last power assets to be put on the auction block, will be bid out in October in hopes of paying back government debt.
Power Sector Assets and Liabilities Management Corp. (PSALM) announced in newspapers it will bid out the contracted capacity of the Naga power plant complex by Oct. 10.
Interested companies must send a letter of interest to PSALM by July 22. A pre-bid conference will be held on Aug. 12.
The Naga power plant complex is the first independent power producer administrator (IPPA) contract and the first power asset to be bid out in the Aquino administration.
It consists of the 43.8-MW Cebu diesel power plant, the 105-MW Cebu thermal power plant and the 55-MW land-based gas turbine plants.
The agency has receivables of around $16 billion, $5.87 billion of which is from the National Grid Corporation of the Philippines and National Transmission Corp. and $10.2 billion from the sale of independent power producer administrator contracts.
These receivables will last until 2026 or until the end of PSALM’s corporate life under the Electric Power Industry Reform Act of 2001 (EPIRA).
It still has financial obligations of $3.78 billion due to incurred debt of PSALM and the Napocor which can be reduced if the agency is able to privatize more assets and collects receivables.
The Naga power plant was supposed to be bid out in July last year but was postponed after the government decided to review its privatization policies.
“When the bidding was postponed last year, we considered the bidding terminated. So investors that expressed interest last year need to send new letters of interest if they want to participate this year,” PSALM vice-president Conrad S. Tolentino said in a telephone interview with BusinessWorld.
PSALM still has to schedule IPPA contracts for the 782-MW Caliraya-Botokan-Kalayaan hydropower plants, 100-MW Western Mindanao Power Corp. diesel power plant, the 50-MW Southern Philippines Power Corp. diesel power plant, the 2,000-MW Mindanao coal power plant, the 92.52-MW Mt. Apo 1 and 2 geothermal power plants and the 165-MW Casecnan hydroelectric power plant.
The agency earlier said it will bid out Casecnan and the 640-MW Unified Leyte geothermal power plant and power barges 101-104 this year.
PSALM filed a petition for universal charge to recover stranded contract costs and stranded debts incurred by Napocor.
The petition requests the Energy Regulatory Commission to allow an increase of P0.39 per kilowatt-hour (kWh) in electricity bills.
The petition seeks to increase rates by P0.03/kWh for stranded debts and P0.36/kWh for stranded contract costs.
Stranded debts refer to any unpaid obligations of Napocor which have not yet been liquidated by the proceeds from the sales and privatization of Napocor assets.
PSALM is the government body mandated by the EPIRA to manage the privatization of the state’s power assets.
It likewise handles the liabilities of Napocor.
Interested companies must send a letter of interest to PSALM by July 22. A pre-bid conference will be held on Aug. 12.
The Naga power plant complex is the first independent power producer administrator (IPPA) contract and the first power asset to be bid out in the Aquino administration.
It consists of the 43.8-MW Cebu diesel power plant, the 105-MW Cebu thermal power plant and the 55-MW land-based gas turbine plants.
Pay Napocor debts
PSALM earlier said continued privatization will allow the agency to pay back more of the debts incurred by the National Power Corp. (Napocor).The agency has receivables of around $16 billion, $5.87 billion of which is from the National Grid Corporation of the Philippines and National Transmission Corp. and $10.2 billion from the sale of independent power producer administrator contracts.
These receivables will last until 2026 or until the end of PSALM’s corporate life under the Electric Power Industry Reform Act of 2001 (EPIRA).
It still has financial obligations of $3.78 billion due to incurred debt of PSALM and the Napocor which can be reduced if the agency is able to privatize more assets and collects receivables.
The Naga power plant was supposed to be bid out in July last year but was postponed after the government decided to review its privatization policies.
“When the bidding was postponed last year, we considered the bidding terminated. So investors that expressed interest last year need to send new letters of interest if they want to participate this year,” PSALM vice-president Conrad S. Tolentino said in a telephone interview with BusinessWorld.
PSALM still has to schedule IPPA contracts for the 782-MW Caliraya-Botokan-Kalayaan hydropower plants, 100-MW Western Mindanao Power Corp. diesel power plant, the 50-MW Southern Philippines Power Corp. diesel power plant, the 2,000-MW Mindanao coal power plant, the 92.52-MW Mt. Apo 1 and 2 geothermal power plants and the 165-MW Casecnan hydroelectric power plant.
The agency earlier said it will bid out Casecnan and the 640-MW Unified Leyte geothermal power plant and power barges 101-104 this year.
Privatization put on hold
Last year, privatization of the contracted capacity of the 650-MW Malaya thermal power was put on hold after its first bidding failed.PSALM filed a petition for universal charge to recover stranded contract costs and stranded debts incurred by Napocor.
The petition requests the Energy Regulatory Commission to allow an increase of P0.39 per kilowatt-hour (kWh) in electricity bills.
The petition seeks to increase rates by P0.03/kWh for stranded debts and P0.36/kWh for stranded contract costs.
Stranded debts refer to any unpaid obligations of Napocor which have not yet been liquidated by the proceeds from the sales and privatization of Napocor assets.
PSALM is the government body mandated by the EPIRA to manage the privatization of the state’s power assets.
It likewise handles the liabilities of Napocor.
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