PSALM to probe bid of SKorean firm for Malaya power plant contract

By Iris C. Gonzales (The Philippine Star) | Updated August 26, 2014 - 12:00am

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM), the government corporation tasked to privatize state-owned power assets,will look into the bid of STX Marine Service Co., Ltd. of South Korea for the 650-megawatt Malaya thermal power plant in Pililla, Rizal.

STX emerged as the lowest bidder for the contract to operate andmaintain the 650-MW aging facility.

Energy Secretary Carlos Jericho Petilla, vice chairman of PSALM, said the board of the government corporation would look into the documents of STX amid concerns raised that while the company offered the lowest bid, there were allegedly lapses in bid documents.“We will look into it,” Petilla said.

Industry sources have raised concerns on lapses in the bid documents submitted by STX and that some of its affiliates have reportedly filed for bankruptcy in Korea two years ago.

Sources said STX offered the lowest bid amounting to P302.149 millionfor the contract to operate and maintain the Malaya plant, or 33 percent below the approved budget cost.

On the other hand, the Malaya project has an approved budget of P451million to be sourced from PSALM’s corporate operating budget.

Aside from the bid concerns, sources also questioned the move of PSALM to open the bidding to a 100-percent foreign firm.

This even if the previous notice to bid issued by the Bids and Awards Committee noted that it would only invite all interested and qualified parties, withat least 60 percent interest belonging to the citizens of thePhilippines.

PSALM president Emmanuel Ledesma Jr., for his part, defended the agency’s decision saying that foreign bidders may be allowed by a treaty, on the condition of reciprocity or when there is a need to prevent situations that defeat competition or restrain trade.

At present, SPC Power Corp. operates and maintains the Malaya plant,which is being managed by PSALM while it awaits privatization.

The facility consists of a 300-MW unit with a once-through type boilerand a 350-MW unit fitted with a conventional boiler, according toPSALM data. source