2nd bidding for Cebu power plant contract fails

MANILA, Philippines - The state-run Power Sector Assets and Liabilities Management Corp. (PSALM) said the second round of bidding for the P350-million contract to operate a power plant complex in Cebu failed as only one bidder submitted an offer.

The agency is still weighing its options for the soon-to-expire operations and maintenance service contract (OMSC) of the Naga power complex, PSALM’s top executive said.

“Two bidders participated in the pre-bid process but only one submitted a bid,” PSALM president and chief executive officer Emmanuel R. Ledesma Jr. said in a text message.

Ledesma said the two firms were SPC Power Corp. and Trans-Asia and Oil Energy Development Corp., both listed in the local bourse.

Late last week, PSALM opened the bids for the OMSC of the 145.8-megawatt (MW) Naga power plant complex.

The first bidding for the Naga complex’s OMSC failed when PSALM received no offer last Feb. 27.

“The Bids and Awards Committee did not open the financial envelope of the bidder due to technicality in the first envelope, thus resulting in a failed bidding,” Ledesma said.

He said PSALM could not consider the two firms as qualified bidders because qualification is determined upon opening of the bid envelopes.

Late in March, SPC bagged a six-month contract to continue operating and maintaining the Naga plant complex, with PSALM committing to pay the firm P148.99 million for its services.

SPC, formerly Salcon Power Corp., is a venture company led by the Salcon consortium that entered into a deal with the National Power Corp. to rehabilitate, operate, maintain and manage the Naga power plant complex starting in 1994.

“PSALM is still considering possible options for the procurement of the Naga OMSC,” Ledesma said.

The Naga complex is composed of three thermal power plants that use a combination of diesel, bunker C oil and coal as fuel.

These power plants are: the 50-MW, coal-fired Cebu Thermal Power Plant 1, the 56.8-MW Cebu Thermal Power Plant 2 and the 39-MW Cebu Diesel Power Plant 1.

Early this year, PSALM started bidding out the supply contract for $16.82-million worth of coal for its Naga power plant complex.

However, Ledesma said the recent bidding’s result is not a basis in gauging investor interest in government plants.

Ledesma said last week’s bidding is a procurement process, not a privatization.