PSALM revises strategy for privatization of gencos

The Power Sector Assets and Liabilities Management Corp. (PSALM) has revised the strategy in the privatization of the generating assets of the National Power Corp. (Napocor), the country’s top energy official said.

Energy Secretary and PSALM vice chairman Vincent S. Perez said they have released a revised sales sequence for the generation companies (gencos), an offshoot of a series of consultations with industry stakeholders and prospective investors.

"We have organized the sales sequence in such a way that the power plants’ fuel types are spread out. We have arranged it regionally wherein there are power plants that are scheduled to be sold in Luzon, Visayas and Mindanao. So this way, we will have a variety that the investors can choose from," Perez said.

He said the new sales sequence has been approved by the PSALM board in a special board meeting last Saturday.

The energy secretary, however, stressed that the revised schedule would not result in a "fire sale". "We want to assure that we will be able to maximize revenues for the government despite the tight schedule," he said.

The revised schedule carries new accelerated timeline for those power facilities that have received numerous expressions of interest.

"We have to keep the momentum. We have to take advantage of the renewed appetite of investors in the generating assets worldwide. We also have to take into consideration the new capacities that we need to build before 2008," Perez said.

For instance, he said they have fasttracked the sale of the 100-megawatt (MW) Pantabangan and 12-MW Masiway hydropower plants to March 2005 from its original schedule of Sept. 2005.

He said Pantabangan is the first major hydropower facility that will be auctioned off during the 18-month sale program.

The new timetable will include six power plants to be sold for 2004 namely: the 1.2-MW Loboc; 225-MW Bataan Thermal; and the 0.4-MW Cawayan for September; the 600-MW Masinloc for October; the 210-MW Navotas I for November; and the 620-MW Limay/Bataan Thermal Site for December.

A total of 16 power plants will be privatized in 2005: the 200-MW Manila Thermal, 114.7-MW Iligan I and II, 100-MW Pantabangan, 12-MW Masiway, 54-MW Cebu II, 850-MW Sucat, 600-MW Calaca, 22.3-MW Gen. San., 275-MW Tiwi/410-MW Makban, 110 MW Pinamucan/36.5 MW Panay 1, 75-MW Ambuklao/100 MW Binga, 150-MW Bacman, 108-MW Aplaya, 192.5-MW Palinpinon, 112.5-MW Tongonan, and 22-MW Bohol.

Another three are scheduled to be auctioned off in 2006: the 0.8-MW Amlan, 360-MW Magat and 246-MW Angat.

Perez said the revised schedule would still meet the government’s goal to sell 70 percent of the genco assets’ capacity in Luzon and Mindanao by end-2005.

Based on this timeline, Perez said 33 percent of the genco capacity in Luzon and Visayas will be sold by end-2004; 50 percent in June 2005 and 70 percent by Dec. 2005.

He said PSALM would also lighten the load in the second half of 2005 to allow more time for the government to negotiate or re-bid the facilities in case of failed biddings.

According to Perez, they will sell the 225-MW Bataan Thermal and 200-MW Manila Thermal, both decommissioned power facilities, as scraps. "There is a big demand for scrap. We hope to get a good price for these plants," he said.

Another decommissioned plant, the 54-MW Cebu Thermal, can also be used as a future site for a new power facility in the province.

Perez said the Manila Thermal or Tegen, located near the Jones Bridge in Manila, could be an ideal site for a commercial complex while Bataan Thermal could be used as a future site for a liquefied petroleum gas (LPG) terminal.