EDC ends arbitration over BacMan plant

Business World Online
Posted on November 21, 2014 09:24:00 PM

A SUBSIDIARY of Energy Development Corp. (EDC) has settled its dispute with the contractor of its Bacon-Manito (BacMan) geothermal power plant, ending an almost one-year old arbitration proceedings, the parent company said.

In a disclosure on Friday, EDC said BacMan Geothermal, Inc. (BGI) has agreed to terminate the arbitration it sought against TurboCare, Inc. and Siemens, Inc. -- the contractor of its power plant in Bicol region.

The Lopez-led company commenced the arbitration before the International Chamber of Commerce on Nov. 28, 2013 after the contractor failed to carry out the rehabilitation works for the BacMan facility.

“BGI and EDC are pleased to announce that, as of today’s date, all claims under the arbitration have now been settled with the Contractor on terms satisfactory to BGI and EDC, and that the Arbitration will be discontinued as a result,” the disclosure read.

“EDC looks forward to pursuing new opportunities with the Siemens group, and strengthening the commercial relationship between the two companies,” it added.

EDC acquired the BacMan power facility in May 2010 after submitting the highest bid of $28.25 million in an auction conducted by the Power Sector Assets and Liabilities Management Corp.

In December 2010, the company started rehabilitation of the facility, which has been generating just 3% of its full capacity.

The asset -- which straddles Bacon, Sorsogon and Manito, Albay -- consists of two 55-MW units and one 20-MW unit.

“As of today’s date all Units at BacMan are operational and the facility is producing a gross output of approximately 130MW,” EDC said in its disclosure on Friday.

But it said that one of the two 55-MW units will be temporarily shut down by December for the installation of a new turbine rotor, and will be again online on March 20, 2015.

EDC is the largest producer of geothermal energy in the Philippines. It operates 12 power facilities in five geothermal service contract areas in the country.

The company, through First Gen Hydro Power Corp., also operates the 132-MW Pantabangan-Masiway hydro power plant in Nueva Ecija.

Shares of EDC shed one centavo or 0.12% to end at P8.15 apiece on Friday. -- Claire-Ann Marie C. Feliciano source