PSALM eyes Sucat plant privatization by 1st half

Posted on December 07, 2016
http://www.bworldonline.com/content.php?section=Corporate&title=psalm-eyes-sucat-plant-privatization-by-1st-half&id=137402

THE Power Sector Assets and Liabilities Management Corp. (PSALM) has pushed back the target bidding schedule for the 850-megawatt (MW) Sucat thermal power plant in Muntinlupa City.

Lourdes S. Alzona, PSALM officer-in-charge, told reporters on the sidelines of an energy investment forum on Tuesday that the target privatization would be in the first half of 2017.

The sale of the decommissioned Sucat plant was originally scheduled in Sept. 2016.

Asked about the cause of delay, Ms. Alzona cited “new developments,” in particular, a new requirement for an environmental clearance.

“We have to wait for the result [of the] DENR [Department of Environment and Natural Resources] clearance,” she said, citing this as the reason for the “slight adjustment in the schedule.”

She added that the bidding process would move only when the PSALM receives the issuance from the DENR. She said the bidding transaction documents are expected to be ready in December.

The plant has four separate units with an installed capacity ranging from 150 MW to 300 MW. It uses bunker fuel and was operated by the National Power Corp. (Napocor).

The plant was last bid out on April 8, 2016 but failed after the three qualified bidders were unable to meet the reserve price set by PSALM board. The bidding, its second, covered the structures, plant equipment, auxiliary and accessories of the power plant. The PSALM board did not disclose the reserve set price.

Four bidders initially submitted their offers for the Sucat plant, but one bidder was disqualified after PSALM ruled that it was non-compliant with the legal requirements of the bidding process. The company’s privatization bids and awards committee convened to discuss the next steps for the asset sale after the bidding failed.

The three qualified bidders were Riverbend Consolidated Mining Corp., VPD Trading and Sta. Clara International Corp.

Under Republic Act No. 9136, the Electric Power Industry Reform Act (EPIRA) of 2001, PSALM is mandated to privatize the generating plants of Napocor and to manage its liabilities in order to reduce the universal charge for stranded debts and stranded contract costs, and to reduce its financial obligations.

PSALM assumed all outstanding obligations of Napocor arising from loans, issuances of bonds, securities, and other debt instruments.