DOE probes delay in Ilijan power project

The Department of Energy (DOE) has vowed to get to the bottom of the delay in the commercial operations of the $800-million 1,200-megawatt (MW) natural gas power plant in Ilijan, Batangas.

"We are presently having intense discussions on the matter, particularly with Keilco, Mitsubishi Corp., Mirant Philippines Inc., and Kyushu Electric," Energy Secretary Vincent S. Perez said, in an interview.

Perez said the discussions are being held to determine who should be held accountable for the delay.

Initially, he said he had been informed that the delay was caused by some technical problems. But he said it appears there is a deeper problem. "There was a problem with one of the gas turbines causing it to overheat. More problems surfaced when it was learned that it was produced by different contractors meaning there was a different contractor hired for the gas turbine," the energy chief added.

Keilco is negotiating with the National Power Corp. (Napocor) on the supposed liquidated damages being asked by the state-owned power firm equivalent to about $400,000 per day of delay. The Ilijan plant was supposed to commence commercial operation at the start of this year.

The power plant is a project of Keilco, Napocor and other power firms, namely Mitsubishi, Mirant (formerly Southern Energy of the US) and Kyushu Electric. The United Engineers International Inc., Raytheon-Ebasco Overseas Ltd. and Mitsubishi Heavy Industries were hired by Keilco to build the power plant.

Despite the delay, Perez is optimistic that the June target for the full commercial operation of the plant will be attained. "Maybe even sooner," he said.

This optimism is shared by Power Sector Assets and Liabilities Management Corp. (PSALM) president Edgardo Del Fonso who recently conducted a plant inspection. "They are on track based on the revised schedule that they presented to us last Saturday," Del Fonso said.

The Ilijan natural gas project is one of the downstream power plants that would be fueled by the Malampaya natural gas.

Aside from the Ilijan project, the Malampaya gas, which could fire a 3,000-MW power plant, will also be sold to Santa Rita (1000 MW) and San Lorenzo (500 MW). Of the three, only Santa Rita is currently operating commercially having switched on the power in October last year.