The Power Sector Assets and Liabilities Management Corp. (PSALM), which oversees the privatization of the assets of the National Power Corp. (Napocor), said Mirant is among 21 foreign and local companies interested in acquiring the Masinloc facility, one of the country’s largest power plants.
Other power generating firms that have earlier signified interest in the privatization of Masinloc are Trans-Asia Power Corp., First Gas Power Corp., Aboitiz Power Corp. and Kepco Philippines Inc.
PSALM conducted a pre-bidding conference yesterday to give the prospective bidders the opportunity to air their concerns before the actual bidding process on Oct. 27.
"All interested parties can raise their issues and concerns on the bidding process so PSALM will have time to verify if there are valid reasons to modify the bidding rules," PSALM vice president for marketing Froilan Tampinco said.
Industry sources said some of the prospective foreign bidders have written Energy Secretary and PSALM vice chairman Vincent Perez to clarify several issues in the auction.
The sources said a particular concern raised by the foreign bidders involves a bidding rule that would allow a local group to match the bid made by a foreign entity.
"The prospective foreign bidders are saying, what is the use of submitting their bids if there is such a thing as a ‘right-to-match’ rule?" the source said.
Masinloc is the first big-ticket item to be sold by the government this year.
Last month, Perez announced that a number of companies from the ASEAN, India, Japan, Korea and the United States have submitted Letters of Intent (LOI) to participate in the privatization of Masinloc as a merchant plant without any power sale contract.
Based on the privatization plan, the winning bidder can pay 40 percent upfront cash and the remaining 60 percent through a deferred payment scheme over a period of seven years.
The winning bidder will then have the option to further lower its upfront cash outlay if it will construct an additional capacity of between 100 to 200 MW for the facility. As a rule of thumb in building a power facility, an investor will need to spend at least $1 million for every one megawatt of power.
"Where applicable, the privatization bid is packaged to encourage prospective bidders to invest in additional capacity," Tampinco said.
Since March this year, PSALM has sold three Napocor generating assets: the 3.5-MW Talomo mini-hydroelectric power plant to Hydro Electric Development Corp. for $391,428 per MW; the 1.6-MW Agusan River mini-hydro power plant to First Generation Holdings Corp. at $995,000/MW; and the 1.8-MW Barit mini-hydro plant to Ramon Constancio at $266,666/MW.
Based on PSALM’s accelerated bidding schedule, it will auction off the 200-MW Manila Thermal and 225-MW Bataan Thermal plants followed by the sale of the 22-MW Bohol and 1.2-MW Loboc power facilities this year.
PSALM will also dispose of the 210-MW Navotas power plant and the 620-MW Bataan Thermal site by the end of this year.