Power barges to fetch prices higher than original bid, gov’t say

Business World Online
Posted on October 14, 2014 10:36:00 PM
By Claire-Ann M. C. Feliciano, Senior Reporter

THE SALE OF three state-owned power barges may fetch prices higher than the original bid of an interested company, a top official of the Power Sector Assets and Liabilities Management Corp. (PSALM) said.

PSALM president and chief executive officer Emmanuel R. Ledesma, Jr. expressed this sentiment as the agency continues to negotiate with Trans-Asia Oil and Energy Development Corp. for the privatization of power barges 101, 102 and 103 progresses.

“We are looking at finalizing the ongoing negotiations with Trans-Asia the soonest possible time at a price higher than their original bid,” Mr. Ledesma said in a text message.

Once acquisition talks are concluded within the year, it will yield a result that is “within the parameters set by the PSALM Board,” he said.

Trans-Asia was declared second highest bidder of the three power assets during the auction in October last year. The company submitted a P370.52-million offer for the assets.

With a P545.52-million offer, SPC Island Power Corp. was originally deemed as the winning bidder but the company last May no longer expressed interest due to the damage caused by super-typhoon Yolanda (international name: Haiyan) to power barge 103.

Since the power barges were sold as one package, SPC Island’s withdrawal covered all the three assets.

As a result, PSALM opted for negotiations with Trans-Asia -- as approved by its board -- instead of doing another round of auction.

Trans-Asia President Francisco L. Viray, the Philippines’ former energy secretary, said last July that his company was still interested with the power barges and expressed willingness to negotiate with PSALM.

Yesterday, the company official confirmed the ongoing talks with PSALM, adding: “The terms and conditions of the sale of the Power Barges are still being discussed by the parties.”

Besides the three power barges, PSALM last year also auctioned off power barge 104 but the bidding failed after both SPC Island and Trans-Asia failed to meet the asset reserve price.

SPC Island submitted a bid of P45.89 million; while Trans-Asia submitted a P30-million bid price.

Eight firms initially expressed interest to participate in the privatization of the all the power barges.

Besides SPC Island and Trans-Asia, the other companies who bought bid documents were: American Capital Energy & Infrastructure; FDC Utilities, Inc.; S.L. Development Construction Corp.; Therma Power Visayas, Inc.; Vivant Corp., and D.M. Wenceslao & Associates, Inc.

Power barges 101 and 102, which were commissioned in 1981, are located in barrio Obrero in Iloilo City.

Power barges 103 and 104, which began operating in 1985, are located in Estancia, Iloilo and Ilang, Davao City, respectively.

Each of these barges has a 32-megawatt capacity.

The first two rounds of bidding for the power barges conducted last year both failed after only one bidder participated in both exercises.

In the first bidding, held in May 2012, only ACTA Power Corp. -- a joint venture of Ayala Corp.’s AC Energy Holdings, Inc. and Trans-Asia -- submitted an offer.

In the second auction, held in August 2012, only Trans-Asia submitted a bid.

PSALM is the agency mandated by Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001, to handle the sale of the remaining state power assets and financial obligations of the National Power Corp. source