SPC Power to ask SC to reconsider Naga plant ruling

Posted on October 20, 2016
http://www.bworldonline.com/content.php?section=Corporate&title=spc-power-to-ask-sc-to-reconsider-naga-plant-ruling&id=135130

SPC POWER Corp. plans to ask the Supreme Court to reconsider its decision reinstating the award of the 153.1-megawatt Naga power plant complex in Cebu to Therma Power Visayas, Inc. (TPVI), a unit of Aboitiz Power Corp.

In a statement, SPC described the high court’s ruling as “grossly disadvantageous to the government.”

The firm also said it was preparing to file a motion for reconsideration before the tribunal, which will reiterate the company’s position that the award “destabilizes the investment climate in the Philippines and retroactively changes the rules on competitive bidding.”

SPC said with the Supreme Court’s ruling to reinstate the notice of award to TPVI, the government stands to lose P54 million and is deprived of a rebid of the Naga plant.

The company said a rebid “would likely result in an even higher price for the government.”

The notice of judgment dated Oct. 5, 2016 is the latest development in the Supreme Court case number G.R. No. 212686 entitled “Sergio R. Osmeña III vs. Power Sector Assets and Liabilities Management Corporation (PSALM), Emmanuel R. Ledesma, Jr., SPC Power Corporation and Therma Power Visayas, Inc.”

It followed the previous ruling of the high tribunal declaring as null and void SPC’s right to top the bid of TPVI by 5%.

TRANSPARENT, FAIR
Late last year, the Supreme Court nullified the notice of award of the Naga power plant to Salcon Power Corp., the precursor of SPC.

AboitizPower described the decision as supporting “a transparent and fair bidding process that encourages competition.” It said had TVPI not participated, the government would have sold the asset at a much lower price.

PSALM held the first bidding for the power plant in 2013, but the first two rounds were declared failed bids as only one bidder, SPC, showed up.

TPVI joined the third round and won with a bid of nearly P1.089 billion, higher than SPC’s P859 million.

PUBLIC BIDDING URGED
SPC said the high court’s decision to reinstate the award to TPVI is contrary to its earlier position that “public bidding is the better means to secure the best bid for the government.”

The company said the court in its decision on Sept. 28, 2015 stated that “attracting as many bidders to participate in bidding for public assets is still the better means to secure the best bid for the government and achieve the objective” under Republic Act 9136 or the Electric Power Industry Reform Act of 2001 to privatize the generation assets under the National Power Corp. “in the most optimal manner.”

SPC said when TPVI’s offered its bid in March 2014 the right to top was known to the bidders. The company exercised its right to top, matched TPVI’s bid and paid an additional P54 million or a total of P1.143 billion to PSALM. The Naga facility was awarded and turned over to SPC in September 2014.

In June 2014, Mr. Osmeña filed a case against SPC and TVPI questioning the validity of the right to top and alleging that it is non-competitive.

“We urge PSALM, chaired by the Finance department, to file its own motion for reconsideration as clearly, the decision is disadvantageous to the government at a time when government needs much-needed funds for employment and other basic services,” SPC said. -- Victor V. Saulon