PSALM eyes $28.68M from auction of Napocor plants

Camp John Hay, Baguio City – The Power Sector Assets and Liabilities Management Corp. (PSALM) expects to generate about $28.68 million (approximately P2 billion) from the sale of some of the generating assets of National Power Corp. (Napocor) over the next three months.

In a presentation during the Economic Journalists Association of the Philippines (EJAP)/San Miguel Corp. annual seminar here, PSALM vice president for asset valuation and disposal Froilan Tampinco said they have lined up a number of mini-hydro, small diesel-fired, and decommissioned power plants for sale mostly in the second quarter.

Tampinco said the estimated proceeds still do not take into account the revenues that would be realized from the sale of several decommissioned power facilities such as the Bataan Thermal and Manila Thermal plants, Aplaya, Gen. Santos and Cebu II power facilities, as well as the Masinloc coal-fired power plant.

He said the estimated proceeds will account for the revenues from the sale of Talomo, Navotas I, Agusan, Bohol/Loboc, Barit/Cawayan, Pinamucan/Panay I power plants.

The Talomo plant in Davao is scheduled for auction on Thursday, March 25, 2004. "At least three local power firms have indicated strong interest to join the bidding for Talomo," Tampinco said.

The PSALM official said they are still waiting for the results of the third party appraisal of Royal Asia and Asian Appraisal to determine the value of the decommissioned power facilities.

"We hope that these two appraisers will come up with the new valuation of these assets before the end of this month," Tampinco said.

He said these two appraisal firms will also be assessing the value of Napocor’s real estate assets to be auctioned off within this year. "We already have preliminary schedule for the sale of the real estate properties of Napocor," he said.

"We need the new valuation for these assets because their book value is still based on 1996 valuation," he pointed out.

He said results of the new valuation will also be used by PSALM in its application for tariff structure under the so-called time-of-use (TOU) mechanism. TOU will allow PSALM to gauge the tariff based on the usage of these power generating plants. For instance, the tariff will be higher during peak demand.

Tampinco also said that another asset valuation firm will also be commissioned by PSALM to assess the new value of the major generating assets of Napocor. "We are currently finalizing the terms of reference for the bidding to get an asset valuator for these major assets," he said.

PSALM expects to raise some $2 billion from the sale of the generating assets and another $2 billion for the transmission assets. Proceeds from the sale of these assets will be used to pay up portion of Napocor’s estimated $9.51 billion stranded debts.