November 11, 2015 9:45 pm by RITCHIE A. HORARIO
SPC Power Corp. has
expressed dismay over the Supreme Court’s decision to nullify its purchase of
the Naga Power Plant Complex, saying this would mean the loss of an additional
300 megawatts (MW) for the Visayas grid.
“What’s even more
frustrating is that prior to the release of the bidding documents for the Naga
Power Plant Complex, the provision on the right to top was vetted by the
Department of Justice, who found it to be legal and enforceable,” SPC Senior
Vice President Alfredo Ballesteros said on Wednesday.
The high court has
ruled that SPC, which took control of Naga complex in October last year, did
not have the right to revise its offer to top Therma Power Visayas, Inc.’s bid,
which was the highest submitted during a March auction.
The Power Sector
Assets and Liabilities Management Corp. (PSALM) gave SPC first refusal rights
based on a 2009 land lease agreement.
Ballesteros said
PSALM considered the right to top a necessary sale condition, adding: “The
bidding rules were very clear and transparent and it specifically mentioned the
right to top of SPC Power Corporation.”
He said not one of
the bidders objected and that all the interested bidders had accepted SPC’s
right to top.
The high court ruling
involved a case filed by Senator Sergio Osmena 3rd, who called the right to top
condition as contrary to public policy.
“This third bidding
itself was also open, public, competitive and transparent, and was won fairly
by SPC by exercising its right to top. SPC paid a 5 percent premium or P54
milion more,” Ballesteros said.
TPVI submitted a
P1.09-billion offer while SPC bid P859 million during the March auction. SPC
subsequently adjusted its offer and paid PSALM P1.14 billion in May.
In voiding the sale,
the Supreme Court’s Third Division said SPC— formerly known as Salcon Power
Corp.—could not exercise first refusal rights under the land lease agreement
due to “lack of valued interest or right to the object over which the right of
first refusal is to be exercised.”
The court pointed out
that the property subject of the right of first refusal was outside of the
premises covered by the lease deal.
SPC, which will be
appealing the court ruling, said businesses cannot develop properly if rules
were changed in the middle of the game.
“Considering the
investments that we already poured in after the award and turnover of the
asset, if at all, a change in rules should only be prospective and not
retroactive,” Ballesteros said.
The Naga Power Plant
consisted of the 52.5-MW Cebu 1 and 56.8-MW Cebu 2 coal-fired thermal power
plants, already demolished, and the 43.8-MW Cebu Diesel Power Plant 1.
Last month, SPC said
it would be creating Cebu Naga Power Corp. to oversee the construction of two
new 2×150-MW facility at the complex.
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