November 25, 2019 | 12:31 am
ANOTHER ATTEMPT of state-led Power
Sector Assets and Liabilities Management Corp. (PSALM) to sell the 650-megawatt
(MW) Malaya thermal power plant failed anew as most of the pre-qualified
bidders backed off and a lone bidder submitted an offer below the floor price,
the agency said.
“PSALM will report to its Board of
Directors the outcome of today’s bidding so that it can take the necessary
steps to lower the MBP (minimum bid price),” it said in a statement on Friday
after going through the auction process. “The next round of bidding for the
Malaya plant will commence at the soonest possible time.”
PSALM, the company formed by law to
privatize state-owned energy assets, said the four entities that were
prequalified to bid for the power plant and the underlying land in Pililla,
Rizal all backed out even after passing the initial stage of the bidding.
“However, right before the deadline
for submission of the financial bid at 12 noon today (Friday), Fort Pilar
Energy, Inc., Panasia Energy, Inc., and AC Energy Philippines, Inc. sent
letters to PSALM saying essentially that they cannot meet the minimum bid price
(MBP) of P4,481,796,017,” PSALM said.
The agency said one other bidder,
D.M. Wenceslao and Associates, Inc., submitted a sealed bid.
“PSALM declared a failure of the
second round of public bidding because there was only one bid,” it said.
It added that pursuant to the
bidding rules, the agency then proceeded to go through the process of a
negotiated sale with D.M. Wenceslao.
“Nonetheless, when PSALM opened the
lone bid from D.M. Wenceslao, it was below the MBP. Thus, PSALM was constrained
to also declare a failure of the negotiated sale process.”
The plant remains operational and
being dispatched as a “must-run” unit. A must-run plant is compelled to run and
provide the needed power supply as deemed necessary to ensure reliability of
power supply in the Luzon grid, especially in times of supply shortfall, system
security and voltage support.
Based on the directive from the
Department of Energy, once the plant is privatized on an “as is where is
basis,” it would no longer be required to be a must-run unit. — Victor V.
Saulon
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