Government scraps power plant sale after 2 bidders bow out

The Philippine government, which is selling power assets to pay debt and exit the industry, scrapped Tuesday’s auction of a 600-megawatt coal-fired thermal plant after two of the three qualified bidders bowed out.

The Power Sector Assets and Liabilities Management Corp., the state agency overseeing the sale, said the two bidders backed out because the Calaca plant didn’t have a supply contract. The remaining bidder was a unit of First Philippine Holdings Corp., the agency said.

"Most of the prospective investors are hesitant, considering that we have yet to close the transition supply contracts with distribution utilities and large power users," Froilan Tampinco, the agency’s vice president, said.

The government is selling power plants to help pay as much as P600 billion of debt incurred to build and operate the plants and transmission network. The government aims to sell by yearend 70 percent of the power generation capacity it owns.

Last year, the government missed a plan to sell 30 percent of its generating capacity, selling only six plants. Last year’s sales, which disposed of 11 percent of state capacity, raised $567 million. Most of the proceeds were from the 600-megawatt Masinloc plant, which raised $562 million when it was auctioned in December.

First Gen Luzon Power Corp., a unit of the third-largest Philippine power producer that isn’t state-owned, was the sole bidder for Calaca, Tampinco said.

A revised sale schedule will be announced later, the agency said. — Bloomberg