State-run Power Sector Assets and
Liabilities Management Corp. (PSALM) is changing the privatization course for
the 210-megawatt Mindanao coal-fired power plant that is currently under the
operatorship of German-led Steag State Power, Inc.
“The privatization track for
Mindanao coal plant will change,” PSALM Officer-in-Charge Lourdes S. Alzona
said, noting that they are more inclined at pursuing buyout of the facility’s
contracted capacity then divest the plant on “straight asset sale”
subsequently.
Alzona said the plan to engage
independent power producer administrator (IPPA) may already be scrapped, and
that is the option that they have initially presented to their principals at
the Departments of Energy and Finance.
“We are currently undertaking a
study on Mindanao coal plant’s privatization…we no longer want to do it as IPPA
deal,” Alzona stressed.
The proposed direction, she said,
“is to study the buy-out option, and then we will sell the asset as a full
privatization exercise.”
She qualified that they would want
to re-assess if the ‘buyout-then-straight-asset-sale option’ may fetch higher
value in terms of cash proceeds.
That will then be their basis and
justification on their propounded divestment plan – which is also indispensable
in seeking the approval of the PSALM Board.
The plant’s contracted capacity
would have been offered for IPPA deal with interested parties by second half of
this year – from a skidded timeline in 2015.
In the original plan, there is
specific condition dangled to prospective investors that the facility’s tariff
would not be adjusted over specified period of time. However, that dampened the
appetite of some bidders.
The Mindanao coal plant is under a
25-year build-operate-transfer (BOT) contract with private sponsors – reckoned
from its effective commercial operation date in November 2006.
Because of its contracted capacity,
the privatization scheme framed through the Electric Power Industry Reform Act
(EPIRA) is of the IPPA appointment mode. But with the buyout plan, direct
divestment of the facility could be consummated later on.
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