Published
By Myrna M. Velasco
State-run Power Sector
Assets and Liabilities Management Corporation (PSALM) has engaged the
Philippine subsidiary of United Kingdom-headquartered PricewaterhouseCoopers
(PwC) as its consultant on asset valuation which will then serve as the basis
of pricing for the sale of the 650-megawatt Malaya thermal power facility this
year.
The government-owned
company said it decided on securing the consultancy services of PwC following
two failed biddings and four negotiations that also fell through.
“PSALM has finally
engaged a consultancy firm for the valuation of the Malaya thermal power plant
and its underlying land,” the company has announced to the media.
The privatization
design initially thought out for the Malaya thermal power plant is to have it
sold on “as is, where is” basis and the package shall include the property
where the facility is sited.
PSALM qualified that in
the auction process undertaken on March 4 this year, PwC “scored the highest
among three competing consultancy firms during the negotiated procurement,” a
process that generally leaned on a quality-based evaluation procedure.
The prescribed criteria
in the selection of a consultant roped in 40 percent for experience; 50 percent
on qualifications; while the balance of 10 percent delves with approach and
methodology in executing the “asset appraisal” task.
On its consultancy
works, PwC is required to craft the financial models and analysis “to optimize
value for the land and structures of the Malaya thermal power plant.”
The consulting firm
will also be aided by a sub-consultant, Asian Appraisal Company, “for
appraising the land underlying the Malaya thermal plant,” and its appointment
shall also be bound “by the same terms and obligations that apply to the
principal consultant.”
At the completion of
required consultancy work, PwC is mandated to present the outcome of its
valuation to the board of directors of PSALM – and that is targeted around
August this year.
The engagement of a
“valuation consultant” had been the major factor that delayed the privatization
of the Malaya plant – as the sale timeline was actually targeted latter part of
last year.
PSALM had done tons of
successful asset privatizations in the past, and it was able to rely internally
on valuation as well as on bringing forth the prescribed reserve price of
facilities on divestment. But for the Malaya plant, it suddenly staggered
without the help of a valuation consultant.
The Malaya plant is the
first power plant asset lined up by PSALM under the Duterte administration; and
it has more to go in the remaining three years of this current government
leadership.
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