PSALM to bid out supply deals

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM), the agency tasked to manage the assets and liabilities of state-owned National Power Corp. (Napocor), will bid out roughly P15 billion worth of fuel supply contracts for four critical power facilities.

According to documents from the state-owned firm, PSALM is seeking suppliers of fuel oil for the Malaya Thermal Power Plant in Rizal for this year at a contract cost of P4.116 billion, for the Naga Power Plant Complex in Cebu worth P4.482 billion; for the Southern Philippines Power Corp. in Sarangani worth P2.394 billion; and finally for the Western Mindanao Corp. in Zamboanga for P3.942 billion.

Interested parties may submit their bids on or before Feb. 19. Bids will be opened on the same day, PSALM documents also showed. Bidders have the option to bid on any or all the projects but the evaluation of bids and the award of contract will be undertaken on a per project basis, the company also said.

PSALM has been trying to privatize the different power plants of Napocor as well as other assets but has not successfully privatized any power asset since 2010.

It hopes to sell some of the assets to help the company cut its debts. PSALM has informed the Department of Finance (DOF) that it expects to borrow less than P60 billion this year as it expects some inflows from the sale of Napocor assets.

PSALM is also hoping for the approval of its universal charge petition pending with the Energy Regulatory Commission (ERC), the state-owned regulator for the power sector.

PSALM is asking the ERC to approve universal charge petition application for stranded debt and stranded contract costs at P0.03 per kilowatthour and P0.36 per kwh, respectively.

The Aquino administration has programmed to refinance the debts of the PSALM to help address the agency’s losses.

As of September 2012, PSALM has total debt and lease obligation to independent power producers of P640 billion, of which P328 billion are debts and P311 billion are IPP lease obligations.