PSALM eyes new strategy in sale of old Napocor plants

The Power Sector Assets and Liabilities Management Corp. (PSALM) is proposing to change its strategy on the sale of the decommissioned power plants of the National Power Corp. (Napocor), a company official said.

PSALM vice president for assets management and disposal Froilan Tampinco, in an interview with the STAR, said a proposed move involves tapping tap the services of a metal scrap disposal firm.

"After we received only one bidder for Manila Thermal, we have decided to get some assistance from an entity that has expertise in scrap asset auctions to re-establish a wider network of prospective bidders," Tampinco said.

While declining to identify the foreign firm, he said, however, that it already has a representative office in the Philippines.

The PSALM official explained that the new approach was triggered by the lack of interest shown by supposed investors in 200-megawatt Manila Thermal power plant, the first decommissioned power facility to be auctioned by PSALM.

At the same time, Tampinco said the sale of the decommissioned plants may be pushed back towards the middle of this year. "We may test this new strategy first before pushing through with the sale of the decommissioned plants."

Tampinco said that the failure of the Manila Thermal’s auction could be attributed to the "lack of proper venue or network to sell these assets".

"The public notices for Manila Thermal were fielded out mostly in the Philippines. Maybe we need to tap a wider market to drum up more interest from international investors, specially the Chinese scrap metal firms," he said.

China, he said, would be a perfect market for these kinds of scrap metals. "There are a lot of economic activities going on in China. They may need these materials for re-processing and rebuilding of their infrastructure."

According to Tampinco, they are already holding an exploratory talks with this specialized firm but expect it to submit a proposal to PSALM soon. "We hope to get a proposal from them within this month."

The proposal by the group, he said, would then be submitted to the PSALM board for approval next month.

The PSALM official said they have already received a previous offer from the same scrap assets disposal expert.

"We have not accepted the offer because of some technicalities. The firm wants to handle both the marketing and sale of the decommissioned power plants. But this is impossible and is not allowed under our mandate," he said.

He said they decided to talk to the same group again and asked them if they are willing to offer their services with a limited scope.

"So far, initial inquiries with the group showed that they may consider it," he said.

PSALM would be selling as scrap the decommissioned plants such as Bataan and Limay Thermal power plants.

It would be recalled that the Manila Thermal bidding failed when only one bidder showed up during the auction.

Tampinco said there were some confusion on the bidding package. "They thought that they would also be bidding for the site. But we told them it would only be the equipment that we will be selling. Most of them backed out."