Gov’t OKs sale of 4 PSALM gensets

The government has approved the sale and recommissioning of four power generation facilities this year, marking the first wave of privatization of the assets held by the Power Sector Asset and Liabilities Management Corp. (PSALM).

The PSALM board of directors approved the disposition of the facilities to prospective private power companies that was expected to ease the financial problems of the National Power Corp.

Finance Secretary Juanita Amatong told reporters that the privatization was part of the administration’s efforts to reduce Napocor’s financial burden and contain its impact on the national budget.

"Some of these gencos will be sold and some that have been decommissioned will be re-commissioned," Amatong said. "We already have prospective buyers."

Approved for disposition are the Agusan power plant and the Pinamukan diesel-powered plant which would also be transferred from Batangas to Iloilo. The other two were identified as the Barit/Cawayan plant and the Bohol/Loboc plant.

Amatong declined to identify the prospective buyers, but earlier reports indicated that one of the prospective private companies interested in the gencos was First Metro Investment Corp. (FMIC) which had already acquired three power plants in 2003.

FMIC is looking at five more power facilities in 2004 as the company expands its out-of-grid niche in the power sector. The plants it was looking at were in Palawan, Cebu and other areas in the Visayas region through its joint-venture company with Mirant Philippines, Inc.

Company sources said that the acquisitions would be coursed through Global Holdings Inc., the joint-venture company formed by FMIC and Mirant. FMIC owns 51 percent of this holding company with the rest owned by Mirant which also acts as FMIC’s technical partner.

According to sources, the plants would be operated by Mirant which already operates the Sual coal power plant in Pangasinan and another coal power plant in Pagbilao also in Pangasinan.

The source said FMIC and Mirant were focusing on under-served areas in the country which were not directly connected to the power grid operated by Napocor.

GHI is currently in negotiations with a number of power producers in the Visayas region, where sources said the economic prospects were good and indicate an increase in power demand.