Napocor to bid out $54-M coal supply contracts

The National Power Corp. is seeking tenders for three coal supply contracts valued at about $54 million.

Official Napocor documents show that the contracts cover the supply of 975,000 metric tons of imported coal (or 325,000 MT each) to the Sual power plant in Pangasinan, the Masinloc plant in Zambales and the Pagbilao plant in Quezon. The delivery of the coal shipments will start in April 2004.

The bidding for the coal supply of Sual and Masinloc has been scheduled for Friday, Jan. 30, while the bidding for the coal requirements of Pagbilao has been set for Feb. 27. Napocor has earmarked a budget of $18.33 million each for Sual and Masinloc, and $17.31 million for Pagbilao.

Napocor has assured that the country will enjoy adequate power supply despite the tight supply of coal in the world market. Among other measures, the state-owned power firm has started a trial firing program for blending coal and blended local and imported coal at the Masinloc plant.

Meanwhile, Napocor belied reports that its present coal procurement strategy has forced it to pay a very high price for its coal supply. Data from the Fuel Management Department indicated that the highest it had paid so far for imported coal was $53.30 per MT, and not $62 per MT as reported in a national newspaper.

As for its use of spot or short-term supply contracts, Napocor explained that this was in compliance with a December 2002 directive from the Department of Energy discouraging it from entering into long-term supply contracts. The DOE had recommended the said procurement shift in the light of the impending privatization of Napocor.

Coal accounts for the biggest share of Napocor generation mix, which refers to the proportion of the different fuel types that it uses to run its power plants.