PSALM awards Malaya power plant contract to SPC

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM) has awarded to the joint venture of SPC Light Co. and SPC Power Corp. the operation and maintenance service contract (OMSC) for the 650-megawatt (MW) Malaya thermal power plant.

PSALM president and chief executive officer Emmanuel R. Ledesma Jr. said the Bids and Awards Committee (BAC) declared yesterday the P715-million offer of the SPC Power group as the lowest calculated and responsive bid for the one-year Malaya OMSC.

Ledesma said although SPC Power was the lone bidder in the tender held last Sept. 5, its offer was within PSALM’s approved budget for the contract of P716.8 million.

The PSALM chief said SPC Power passed the post-qualification process set by the BAC in accordance with the Government Procurement Reform Act, its revised implementing rules and regulations, and other provisions stipulated by the Government Procurement Policy Board.

“PSALM will issue a formal notice awarding the Malaya OMSC to the consortium, which will require the winning bidder to post a performance security bond and enter into a contract with PSALM within 10 calendar days,” he said.

“Our subsequent issuance of the notice to proceed after the approval of the contract will formally commence the OMSC contract with SPC Power,” he added.

Situated in Pililia, Rizal, the Malaya plant was rehabilitated in 1995 by Korea Electric Power Corp. (Kepco) under a 15-year rehabilitate-operate-manage-maintain agreement.

The plant consists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler.

SPC Power Corp. is the successor owner of the 55-MW Naga land-based gas turbine (LBGT) plant after a negotiated bidding conducted by PSALM in October 2009.

Prior to the privatization of the Naga LBGT plant, SPC Power (formerly known as Salcon Power Corp.) entered into a 15-year contract with the National Power Corp. (Napocor) for the rehabilitation, operation, maintenance and management of the 203.8-MW Naga power plant complex from 1994 to 2009, and an OMSC with PSALM from July 2010 to March 2012.

PSALM was supposed to bid out yesterday the management contract for the Naga power complex but decided to postpone it indefinitely upon the request of the Joint Congressional Power Commission (JCPC) to conduct a review of the bidding process over an alleged unfair and illegal rule known as a “right to top” the highest bid previously granted to SPC Power in the land lease agreement.

“The JCPC is tasked primarily to oversee the restructuring and privatization of the power industry under the Electricity Power Industry Reform Act (EPIRA).

“JCPC is not stopping nor delaying the privatization. JCPC is only ensuring that the most advantageous transaction for the government can be achieved in accordance with the mandate of the EPIRA,” House Deputy Speaker Lorenzo Tañada III said.

Tañada, however, noted there are instances when the right to top is allowed when it would result to higher revenues for government.

“In other asset sales, it will be logical to include ‘adjacent lands’ since there are no other power plants constructed thereon.

But it is different in the case of the Naga complex since there are other power plant facilities within the area,” he said.