Meralco to hire construction firm for $1.2-billion power plant project

MANILA, Philippines - Manila Electric Co. (Meralco), the country’s largest power distributor, is ready to hire a construction firm for its $1.2-billion coal-fired power plant in Zambales.

The company is still waiting for an environmental clearance before concluding talks with two contractors, an executive said.

“I think we are almost there (signing of a contract). There are still ongoing discussions,” said Meralco president and CEO Oscar Reyes.

Reyes said Meralco is in talks with two parties for the engineering, procurement and construction deal for the 600-megawatt (MW) coal-fired power plant in the Subic Bay Freeport Zone in partnership with Aboitiz Power Corp. and the local unit of Taiwan Cogeneration International Corp.

“We are just waiting for the environmental compliance certificate (ECC),” Reyes said, adding that the company has submitted all the requirements a few months ago.

In June, Meralco, through subsidiary Meralco PowerGen Corp., conducted a public consultation that is a requirement of the Department of Environment and Natural Resources prior to the issuance of an ECC.

However, the host community is concerned of the project’s environmental impact. Local officials are also against the power plant because it is free from real property tax.

Meralco wants to start commercial operations of the power plant in the first half of 2016.

However, Reyes said the company is getting close to the crucial period, which might result in a delay in the project.

Data from the Department of Energy showed that supply situation be at a critical level for the Luzon grid starting in 2015 if there are no power plants that start operations.

Reyes said the demand for electricity is growing at a healthy pace of more than five percent for 2009-2012, faster than the annual uptick of 2.2-2.3 percent in 2001-2008.

“There are already concerns on adequacy and reliability of power,” Reyes said.

The coal plant in Subic is the first of numerous power generation ventures of Meralco, which targets to reach a power generation capacity of 2,700 MW from now until 2020.

The Meralco, which is indirectly controlled by Hong Kong-based First Pacific Co. Ltd. and partly owned by San Miguel Corp., is pursuing electricity generation to ensure long-term supply given continuous demand growth in its franchise area.the year.