Angat power unit turnover delayed further

Business World Online
Posted on March 17, 2014 11:05:22 PM 

THE TURNOVER of the 218-megawatt (MW) privatized segment of the Angat hydroelectric power facility faces further delay, an official said last week, as the Power Sector Assets and Liabilities Management Corp. (PSALM) expects remaining issues to be resolved by May. 
Emmanuel R. Ledesma, PSALM president and chief executive officer of PSALM admitted that the firm could not close the sale of the asset to Korea Water Resources Corp. (K-water) this month. “PSALM and K-water are working closely to avoid further delay in the turnover of Angat to K-water due to unresolved issues,” Mr. Ledesma said in a text message on Friday last week. 
He said these issues involve the issuance of business permit and approval of K-water’s loan application, but did not elaborate on specific problems surrounding these requirements. 
Mr. Ledesma had said in late January that closing of the sale was expected by March 25, already delayed from the initial January target. 
“Once we get those issues done, it should be okay. We are looking to complete that in one to two months, so by May,” the official added. 
The Angat plant, located in Norzagaray, Bulacan, consists four main units with 50-MW capacity each and five auxiliary units with a combined capacity of 46 MW. K-water has rights to own and operate the 218-MW portion of the power plant -- consisting of the main units and the first three auxiliary units with 18-MW total capacity -- after it submitted a bid price of $440.88 million a 2010 auction held by PSALM. PSALM, in September last year, issued the certificate for the sale of the 218-MW portion of the 246-MW Angat plant to K-water but closing was subject to certain conditions provided by the contract. 
The remaining 28-MW portion of the plant -- composed of the fourth and fifth auxiliary turbines owned by Metropolitan Waterworks and Sewerage System (MWSS) -- was offered under the government’s flagship public-private partnership (PPP) program. 
The P1.155-billion PPP project involves a 20-year rehabilitate-operate-maintain contract to upgrade two underperforming turbines of the plant. However, the prequalification process for the project held in April last year failed after only one bidder -- FAM Energy -- passed the technical and financial qualifications. 
MWSS Administrator Gerardo A.I. Esquivel said in December that MWSS was looking at selling the two auxiliary turbines of the plant to K-water instead of offering it again under the PPP. 
"We are looking at negotiating with K-water on this, considering that it’s best that there’s only one operator for the power plant,” said Mr. Esquivel, noting that if the plan were to push through, the project would be removed from the PPP program. 
K-water, established in 1967, implements national water resources management policies related to multipurpose dams, water supply dams and regional water supply systems in South Korea, according to its Web site. 
PSALM was formed under Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001, to assume ownership of and manage all National Power Corp.’s (Napocor) assets, liabilities, contracts with independent power producers, real estate and other disposable assets. 
The firm is also in charge of privatizing and disposing of these assets to liquidate Napocor’s financial obligations. -- Claire-Ann Marie C. Feliciano source