PSALM fails to sell Naga Power Plant in Cebu

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), failed to sell the 153.1-megawatt Naga Power Plant Complex in Cebu.

In a July 15 meeting, the PSALM bids and awards committee (PBAC) declared a failure of bidding for the Naga plant after only one bidder submitted documents deemed compliant by the committee.

“Pursuant to the bidding procedures, should only bidder submit documentary deliverables that is deemed compliant by the PBAC, there shall be a failure of bidding,” PSALM said in a notice.

Despite the failure of bidding, PSALM is optimistic that it would be able to privatize the power plant before the end of the year.

“PSALM will proceed with the second round of bidding soonest,” the agency said.

Sources said the failure of bidding was not expected after four groups earlier expressed interest in bidding for the plant.

DMCI Holdings Inc., the Aboitiz Group, D.M. Wenceslao and SPC Power Corp. joined the pre-bid conference for the Naga Plant privatization.

DMCI Holdings is owned by the Consunji Group, an established construction business that has also expanded into the power sector through the 600 MW Calaca coal fired power plant in Batangas.

D.M. Wenceslao, meanwhile, is also a construction firm with more than 40 years experience.

AboitizPower Corp., meanwhile, is the power generation arm of the Aboitiz Group, one of the country’s conglomerates.

SPC Power, former Salcon Power, currently operates the Naga complex through an operations and maintenance agreement with PSALM.

The Naga complex in Cebu 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-megawatt 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.

As of December 2011, PSALM’s privatization proceeds from the sale of generating assets, decommission plants, transmission assets and appointment of independent power producer administrators have reached $10.210 billion.