Bidding for power barges fails anew

MANILA, Philippines - The second round of bidding and negotiated sale of power barges by the Power Sector Assets and Liabilities Management Corp. (PSALM) yesterday failed anew as the lone bidder submitted an offer way below the floor price.

The failed auction puts a strain on the government’s attempts to transfer the power barges to electricity-starved Mindanao prior to the summer season next year.

Trans-Asia Oil and Energy Development Corp., the lone bidder, offered to buy the power barges for nearly P95 million during the planned negotiated sale yesterday.

“It was a failed bidding. Yes, they did not meet the reserve price on all three packages and they also decided not to match [the floor price for] any of the packages,” said PSALM president and CEO Emmanuel Ledesma Jr.

Specifically, Trans-Asia offered P94.964 million (P43.829 million for the package of Power Barge (PB) 101 and 102, P1.008 million for PB 103 and P50.127 million for PB 104).

Designed as base-load plants, PB 101, 102, 103 and 104 are nominal 32-megawatt (MW) barge-mounted, bunker-fired diesel generating power stations that consist of four identical Hitachi-Sulzer diesel generator units rated at eight MW each.

“The difference [of the floor price and offer price] was substantial,” Ledesma said, although refusing to disclose the reserve price.

Trans-Asia president Francisco Viray said the company chose not to match the high price set by PSALM.

Prior to the negotiated sale in the afternoon, PSALM declared the second round of public bidding a failure as only Trans-Asia submitted an offer yesterday morning.

“Under a process but is subject to board approval, PSALM can conduct another bidding or renegotiation,” said Conrad Tolentino, PSALM vice-president for asset management.

Last month, four investor groups expressed interest in the sale of PB 101, 102, 103 and 104. Three of the four prospective bidders participated in PSALM’s previous bidding activities.

In May, the auction for the power barges — the firm’s first privatization effort this year — failed as only one of seven qualified bidders submitted an offer.

Only ACTA Power Corp., a joint venture between AC Energy Holdings Inc. of Ayala Corp. and Trans-Asia of the Phinma Group, submitted its bid.

The power barges, which are movable and can be relocated anywhere with adequate mooring structures, should be transferred from Visayas to Mindanao augment the power supply in the region.

“It is not an option to keep the assets,” Ledesma said, adding that PSALM has pegged the selling price at fair value.

Despite the failure, PSALM will push through with the bidding for the independent power producer administrator (IPPA) contract for two power plants.

Ledesma said the company will auction the IPPA contracts for the 640-MW Unified Leyte geothermal power plants in Leyte and the 140-MW Casecnan multipurpose hydroelectric plant in Nueva Ecija as separate paackages in the fourth quarter.