SPC Power consortium wins Malaya plant auction

Business World Online
Posted on October 10, 2011 10:09:20 PM


AN SPC Power Corp. consortium has won the operations and maintenance contract for the 650-megawatt (MW) Malaya thermal power plant, a state agency yesterday said.
The lone P715-million joint bid of SPC Power and its subsidiary SPC Light Co. was just under the government’s approved budget of P716.8 million for the one-year contract covering the petroleum-powered facility in Pililla, Rizal, the Power Sector Assets and Liabilities Management Corp. said in a statement.


“PSALM will issue a formal notice awarding the Malaya operations and maintenance service contract to the consortium, which will require the winning bidder to post a performance security bond and enter into a contract...within 10 calendar days,” PSALM President Emmanuel R. Ledesma, Jr. said in the statement.


A notice to proceed will then be issued to formally seal the contract, Mr. Ledesma said further in the statement.


PSALM set the bidding for the operations and maintenance of Malaya thermal power plant after Korea Electric Power Co.’s (Kepco) build-operate-transfer deal for Malaya expired in January and the plant was turned over to the government.


The first time the bidding was held, SPC Power was chosen but the deal fell through when the firm failed to meet the post-qualifications requirements.


The Energy department chose to extend the operations contract of Kepco for six months in the meantime.


This time around, however, “the SPC Power Consortium passed the post-qualification process,” PSALM said.


The plant’s output was supposed to have been bid out by the government last year but the exercise failed after only one firm, First Gen Corp., filed a proposal.


But now, a sole bidder can be entertained as PSALM is bidding the operations contract under the procurement law and not its own privatization rules used when auctioning off the government’s power assets.


The plant could be up for conversion to use natural gas instead as part of the Energy department’s alternative fuel plans.


The department earlier said it is looking to extend the Batangas- Manila natural gas pipeline to feed into the Malaya plant.


The results of the Malaya bidding comes just after PSALM decided to defer auction for the output of the Naga power plant in Cebu, a project which SPC Power has been granted the privilege of winning the bid if it matches the highest offer.


PSALM had justified this “right to top” option for SPC Power by pointing to the land lease agreement between the firm and the National Power Corp. for the gas turbine on the complex.


SPC Power saw its consolidated net income fall 27.6% to P186.4 million in the first half of the year from P257.4 million in the year previous due to losses from one of its subsidiaries.


Shares of SPC Power were last traded on Sept. 30 and closed at P3.90 a piece. -- Emilia Narni J. David