TEC Industries bags 2 old power plants for $1.48 million

MANILA, Philippines – A Filipino-Chinese scrap company TEC Industries Inc., bagged the fourth and fifth decommissioned power facilities – 108-megawatt Aplaya and 22.3-MW General Santos diesel power plants — in a negotiated bidding held May 25, 2009, the Power Sector Assets and Liabilities Management Corp. (PSALM) reported yesterday.

PSALM said TEC officials agreed to match the reserve price of $1.488 million for the packaged decommissioned plants.

Under applicable government rules, PSALM can negotiate with interested parties after a failed second round of bidding.

Monday’s proceedings began as the second round of bidding for the decommissioned assets. TEC’s first bid envelope was rated passed, while the only other bidder was disqualified for failing to comply with the requirements for the first bid envelope. This left TEC as the lone bidder for the plants.

TEC’s original bid of $788,000 did not meet the government’s set reserve price.

After declaring a failed second round of bidding, the PSALM board authorized PSALM to negotiate with the qualified bidder for the privatization of the decommissioned plants in accordance with PSALM’s negotiation procedures.

PSALM said the reserve price was then disclosed to TEC which agreed to match it.

TEC must now submit to PSALM a bid security reflecting the increase in TEC’s offer. The notice of award signifying TEC as the new owner of the decommissioned Aplaya-GenSan power plants will be issued after PSALM validates TEC’s submitted documents.

A Cebu-based company that started operations in 1984, TEC has particular interests in furniture manufacturing and exporting. The company decided to venture into the trade of ferrous and non-ferrous surplus materials, particularly abroad, after the global market for furniture started to shrink.

Including the Aplaya-GenSan facilities, PSALM, so far, has successfully bid out four decommissioned assets this year. It sold through negotiations the 54-MW Cebu II diesel and the 225-MW Bataan thermal power plants on Jan. 22 and April 16, 2009, respectively.

PSALM’s first successful sale of its retired power assets was the 200-MW Manila thermal power plant bid out on April 25 last year.