Coal deal between Aussie firms, Napocor recalled

The National Economic and Development Authority (NEDA) has asked the state-run National Power Corp. (Napocor) to put on hold at least two coal supply contracts with Australian firms, Coal & Allied and Cumrock for the supply of coal to the Masinloc power station, industry sources said.

Sources said the NEDA questioned the contracts because the price would put the Napocor at a disadvantage.

Under the law, the NEDA has the final authority to approve bid transactions entered into by Napocor with private companies. Any contract beyond P50 million will needd approval of the Office of the President.

Napocor submitted the contracts for the approval of NEDA last January but these were not acted upon immediately due to the abrupt change in administration.

As a result of this cancellation, Napocor is conducting a tender on July 6 for seven panamax shipments with an option for two for delivery to Masinloc in August to December this year.

The sources said the Australian coal firms are asking Napocor to reconsider.

According to a Masinloc power plant officer, the disapproval of the Australian contracts would mean a fuel run-out by July 23 this year. But the officer said this could be averted if the Napocor will divert some of its recently-approved coal shipments from Shensua Coal firm which is intended for the Sual power plant.

The plant official said the state-owned power company will make necessary arrangements with Shensua for the latter to increase the scheduled monthly deliveries to accommodate the requirements of both Sual and Masinloc in case there would be a failed bidding on July 6.

Last week, the NEDA approved the negotiated Shensua contract for seven panamax shipments, with an option for two more. Shensua has yet to be formally notified of the approval.

NEDA also gave approval to a negotiated contract with Kitadin of Indonesia for five panamax shipments, with an option for two for the Calaca power station, but has yet to formally issue a formal confirmation. – Donnabelle Gatdula