Bidding for Napocor’s reinsurance policy set

The second bidding for the $6.5-billion industrial all risks (IAR) policy of the state-owned National Power Corp. (Napocor) will be held on Monday, Nov. 19, a top government official said yesterday.

Finance Undersecretary Antonio Bernardo said that the joint biddings committee, tasked to handle the reinsurance of the country’s largest power producer, decided to conduct the auction next Monday.

He said the new date was finalized in a committee meeting attended by representatives from Napocor and the Government Service Insurance System (GSIS) last Friday.

Bernardo is the chairman of the committee which was created by President Arroyo through a Memorandum Order 30. Both GSIS and Napocor, with two representatives each, have voting rights in the committee.

The first bidding of the IAR was held last Sept. 27 but failed when the prequalified bidders opted to submit letters of regret.

The six brokers, prequalified to join the bidding, cited the continuing instability in the market brought by the Sept. 11 terrorist attacks on the United States as the reason for their inability to participate in the bidding

According to Bernardo, the committee already sent the terms of Reference and Letters of Invitation to the prequalified brokers last Nov. 12. These bidders include: Agnew Higgins Pickering, Marsh & McLennan, Aon Energy, Alexander Forbes, Arthur Gallagher, and Heath Lambert.

The DOF official said the insurance brokers would be asked to submit bids for four components: the basic IAR, terrorism and sabotage, submarine cable, and marine policy.

He said the opening of the sealed envelope would be done in the morning of Nov. 19 while the electronic biddings will be held in the afternoon.

The joint bidding committee, will then decide which of the components will be combined with the basic IAR to have the most optimum re-insurance coverage for Napocor’s insurable assets. The broker which submitted the best bid for the coverage desired by the committee will be declared the winning bidder.

The brokers will be required to place 30 percent of the insurance coverage by Nov. 19. Completion of the 95 percent is required by Nov. 29, 2001.