Updated
By
Myrna M. Velasco
The US$3.0-billion
Atimonan coal-fired project of the power generation investment arm of Manila
Electric Company (Meralco) had been granted pioneer incentives by the Board of
Investments (BOI), a top company executive has announced in a briefing with
reporters.
Meralco PowerGen
Corporation President Rogelio L. Singson said the project was “given the
pioneer status because we are the first ultra super-critical 2×600 megawatt
facility in the country.”
As a project of pioneer
status, the 1,200MW Atimonan plant will be bestowed longer income tax holiday
(ITH) of at least six years, plus it shall be able to enjoy suite of tax perks
and other non-fiscal incentives.
The Atimonan power
plant venture is a “shovel ready” project, but the award of its engineering,
procurement and construction (EPC) contract cannot be consummated yet following
regulatory snag on the approval of its power supply agreement.
The fate of the Atimonan
project, relative to delays on go-signal of the Energy Regulatory Commission
(ERC) on its supply deal, is a parallel stumbling block being suffered by the
company’s other 600-megawatt power plant project in Subic.
Singson said they had
just lost the initial EPC contract signed with South Korean firm Daelim
Industrial Co. Ltd. – a deal that should have been cheaper than what they ought
to negotiate anew given the tender re-submission of the prospective contractor.
“Unfortunately without
the PSA, the contractor said we cannot continue honoring the extended EPC
contract,” Singson stressed.
He added that Daelim
had to submit a new contract, with Singson emphasizing that “they did submit
this April…we have people from Daelim sitting down with our technical people
who are just looking over the new EPC price proposal.”
Singson qualified
though that the cost of the new EPC contract is “way much higher than the
extended contract.” Notably, Meralco first negotiated the EPC contract for the
Redondo Peninsula power project in Subic way back in 2012; then when it had
fallen due, it was stretched until December last year.
“Keep in mind that the EPC contract of RPE was already on an extended term. That should have lapsed in 2016, but we’re able to get an extension until December, 2017 for some escalation provision,” the Meralco PowerGen chief executive has reiterated.
“Keep in mind that the EPC contract of RPE was already on an extended term. That should have lapsed in 2016, but we’re able to get an extension until December, 2017 for some escalation provision,” the Meralco PowerGen chief executive has reiterated.
On the Swiss challenge
for the PSAs of the two projects as propounded by the Department of Energy
(DOE), Singson opined that as in any government policy, any application of such
must be done prospectively – and shall not cover projects that had already gone
through prevailing policy processes.
“We’re hoping that the implementing rules which are being discussed right now for CSP (competitive selection process) for Swiss challenge, when adopted by the ERC and DOE, will be used prospectively,” he stressed.
“We’re hoping that the implementing rules which are being discussed right now for CSP (competitive selection process) for Swiss challenge, when adopted by the ERC and DOE, will be used prospectively,” he stressed.
Singson added “we are
just hopeful that they realize that for example, Atimonan, we’ve gone through
the full process…the prescribed process adopted by the ERC.”
The CSP is an auction
system to institutionalize transparency in the procurement of power supply by
the distribution utilities, the likes of Meralco and the electric cooperatives.
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