19 power plants up for bidding this year

The Power Sector Assets and Liabilities Management Corp. (PSALM) will bid out 19 power plants this year in an effort to hasten the privatization process and pave the way for the operation of the wholesale electricity spot market (WESM) and open access.

PSALM vice president for asset management Froilan Tampinco said with this, they are encouraging interested investors to conduct their preliminary reviews and obtain a better appreciation of the power plants to be sold even before the formal start of the sale process.

Tampinco identified the 19 power plants to be placed on the auction block in 2005 including five decommissioned plants. These are: Coal-fired  power plant – 600MW Calaca; hydroelectric plants – 75MW Ambuklao and 100MW Binga which will be offered as one package, 12MW Masiway, 100MW Pantabangan, 360MW Magat, 246MW Angat, and 0.8MW Amlan; Geothermal plants — 275MW Tiwi and 410MW Makban as one package, 150MW Bacman, 192.5MW Palinpinon, and 112.5MW Tongonan; Bunker Oil-fired 850MW Sucat, 146.5MW diesel-fired Dingle and the package of 620 MW combined cycle Limay and Bataan thermal site; and Decommissioned plants 225 MW Bataan Thermal, 200 MW Manila Thermal, 54 MW Cebu II, 22.3MW General Santos and 108MW Aplaya.

By allowing interested parties an early opportunity to conduct a preliminary review of these assets, Tampinco said PSALM hopes to reduce the time between individual sales and thereby expedite the privatization process.

"We would like to stress that the preliminary asset review process is not part of any formal sale process. Those who could not do their preliminary reviews would still be allowed to submit their bids," Tampinco said.

After submitting their letter of intent to conduct a preliminary review, the interested parties are required to sign a confidentiality agreement so that they can have access to confidential information in the data room as well as asset site visits. Corresponding data room and preliminary site visit fees are charged by PSALM.

Tampinco said several interested parties have started conducting their preliminary reviews on certain plants.

The PSALM official, however, declined to reveal the identities of the parties as PSALM and these groups are bound by confidentiality agreements.

He said the acceleration of the privatization process through preliminary review will facilitate the implementation of WESM and open access.

"With the operation of the WESM and open access, large power users can choose and contract directly to specific power generators by simply paying a wheeling fee for the use of the transmission and distribution lines.