PSALM lines up Masinloc plant for rebidding by mid-year

The Power Sector Assets and Liabilities Management Corp. (PSALM) will rebid the Masinloc coal-fired power plant in Zambales by the middle of this year, a ranking company official said.

PSALM vice president for asset management and electricity trading Froilan Tampinco said Masinloc will likely be the next big-ticket item to be auctioned by the government following the bidding for the National Transmission Corp. (TransCo) next month.

"We are looking at bidding out Masinloc by the middle of the year or early second semester.  We are finalizing the terms with the National Power Corp. (Napocor) for the supply contract that would be attached to the plant," he said.

Tampinco said they hope to get as much interest as before for the Masinloc bidding.

He recalled that the first time government announced the sale of Masinloc, there were at least 23 investors that expressed interest to participate in the bidding.

"We hope to get the same response," Tampinco said, noting that this time, the coal-fired power plant will be sold with a supply contract.

Tampinco said they would know exactly how many investors will join the bidding for Masinloc by the end of this month or early February as PSALM will start issuing the bid documents for the plant.

He said the signing of the transition supply contract (TSC) with Napocor and the Manila Electric Co. (Meralco) recently will ensure a ready market for Masinloc, thus making it palatable to bidders.

It would be recalled that Masinloc’s sale in December 2004 became controversial when its winning bidder, YNN Pacific, failed to come up with the downpayment for the power plant due to the absence of a TSC.

Last month, Napocor and Meralco finally signed a five-year TSC, which carries a five-year term but will be automatically terminated one year after the introduction of the open access scheme.

The TSC would assure buyers of Napocor’s power plants of a captive market, thus making the power plants that will be sold more attractive to investors.

The PSALM official said they hope to dispose Masinloc before the sale of Napocor’s geothermal assets.

He said they would need to thresh out some issues on the geothermal assets of Napocor, like the Tiwi-Makban geothermal complex, before they are auctioned off.

He admitted that concerns on the steam sales agreement for these geothermal facilities have yet to be fleshed out.