Monday, June 10, 2019

PSALM sets auction of 650-megawatt Malaya Thermal plant in August


Danessa Rivera (The Philippine Star) - June 9, 2019 - 12:00am

MANILA, Philippines — State-run Power Sector Assets and Liabilities Management Corp. (PSALM) will bid out the 650-megawatt Malaya Thermal Power Plant (TPP) in August, after tapping PricewaterhouseCoopers Philippines to do the valuation of the asset.
PSALM has engaged a consultancy firm for the valuation of the Malaya TPP and its underlying land after two failed public biddings and four failed negotiated procurements.
PwC Philippines scored highest among three competing consultancy firms during the negotiated procurement based on the quality-based evaluation procedure that PSALM conducted last March 4.
The criteria used in the bidding comprised 40 percent for experience of the consulting firm, 50 percent on qualifications of consultants and the remaining 10 percent allotted to approach and methodology.
As the winning principal consultant, PwC Philippines shall be responsible for the crafting of financial models and analyses to optimize value for the land and structures of Malaya TPP.
Meanwhile, sub-consultant Asian Appraisal Co. Inc., shall be responsible for appraising the land underlying the Malaya TPP and is bound by the same terms and obligations that apply to the principal consultant.
PwC Philippines will present the results of its valuation to the board of directors of PSALM in August, the same day of the conduct of the public bidding for the Malaya TPP and its underlying land.
The Malaya TPP was supposed to be bid out last Dec. 14 but the PSALM board decided to push back the privatization schedule since there was no basis for a base price yet.
The base price for the asset should have come from third party assessment. However, PSALM had several failed biddings for consulting services.
At that time, no consultancy firm participated since the agency required a short period to do the valuation for the Malaya asset.
For the sale of the asset, PSALM had previously said there were four qualified bidders namely AC Energy Inc., DM Wenceslao and Associates Inc.,  DMCI Power Corp. and FGen Reliable Energy Holdings Inc.
This was down from the 11 firms that submitted letters of interest (LOIs).
While waiting for the privatization of the government asset, the Malaya TPP will be operated and maintained by Korean company Soosan ENS Co. Ltd. (Soosan ENS) for a period of one year.
PSALM issued the operation and maintenance (O&M) contract to Soosan, which was declared the lowest compliant bidder with its P205.73 million offer.
Part of the responsibilities under the service contract includes the day-to-day upkeep, management and maintenance or repair of the power plant and its equipment.
Located in Pililia, Rizal, the facility consists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler.
It was last rehabilitated in 1995 by Korea Electric Power Corp. under a 15-year rehabilitate-operate-manage-maintain agreement.
The Malaya power plant was designated as a must run unit by the Department of Energy to address supply deficiency when operating power plants in the grid suddenly bog down or become unavailable.

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