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Business

37 companies line up to bid for Pantabangan hydro facilities

- Donnabelle L. Gatdula -
At least 37 firms have expressed interest to bid for the 12-megawatt (MW) Masiway and 100-MW Pantabangan hydro power facilities which the Power Sector Assets and Liabilities Management Corp. (PSALM) will place in the auction block before the year ends.

The keen interest from investors were manifested during the pre-bid conferences held last Oct. 19 for Masiway and Oct. 21 for Pantabangan. Sources said those that have indicated plans to bid for the two hydro facilities of the National Power Corp. (Napocor) are mostly independent power producers (IPPs) already operating in the country.

Among these firms that would likely bid for the two power plants are: CalEnergy, Korea Electric Power Corp., Aboitiz Equity Ventures with partner Norwegian firm SN Power, First Generation Holdings Corp. and TransAsia Power.

Aside from Masiway and Pantabangan, PSALM will also bid out the  300-MW Magat facility and the 275-MW Tiwi and 425.73-MW Makiling-Banahaw geothermal complexes.

Prospective bidders for Pantabangan and Masiway are required to complete the bidding requirements until Nov. 25.

For the Tiwi-MakBan plants, interested parties are requested to undertake due diligence until Dec. 5.

PSALM has set the bid security deposit for the Tiwi-MakBan assets at $9 million each. For Masiway and Pantabangan, the bid deposit shall be $2 million each.

The bidders would also be asked to submit the deposit in the form of an irrevocable letter of credit, confirmed by a local bank and shall be assured that this is acceptable to the Privatization, Bids and Awards Committee.

Sources said that during the pre-bid conference, investors have expressed concern on the issue of restricting foreign nationals from developing and exploiting the country’s indigenous resources such as hydro and geothermal power.

Some American energy firms have raised concern over "limits on foreign utilization of natural resources for hydro or geothermal power generation." These firms, sources said, believe this particular policy makes investments in new or privatized assets based on these power sources unattractive.

The sources added the prospective investors are particularly wary about a Constitutional provision that may limit utilization of certain natural resources (such as water and geothermal resources) for power generation to at least 60 percent Filipino-owned companies as provided under Article XII, Sec. 2 of the Constitution.

Another issue is the minimum 60 percent Filipino ownership required to obtain water rights for hydropower generation under the implementing rules of the Water Code of the Philippines.

They also raised concerns about the issue on the extent of foreign participation that will be allowed in the privatization of certain Napocor generation assets.

The investors likewise remain wary on the judicial intervention on some power-related issues.

Foreign and local investors have admitted that they opt to adopt a "wait and see attitude" with regard to the privatization of other assets of Napocor as they are still waiting for a more stable investment climate in the power sector, sources said.

vuukle comment

ABOITIZ EQUITY VENTURES

BID

BIDS AND AWARDS COMMITTEE

FIRST GENERATION HOLDINGS CORP

FOR MASIWAY AND PANTABANGAN

FOR THE TIWI

KOREA ELECTRIC POWER CORP

MASIWAY AND OCT

MASIWAY AND PANTABANGAN

NAPOCOR

POWER

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