DOJ opinion sought on sale of Naga plant

MANILA, Philippines - The Department of Energy (DOE) and the Power Sector Assets and Liabilities Management Corp. (PSALM) are seeking the opinion of the Department of Justice (DOJ) on how to address the thorny issues surrounding the sale of the 153-megawatt Naga power plant in Cebu.

“The DOJ will be consulted. We are requesting for a DOJ opinion,” Energy Secretary Carlos Jericho Petilla said.

Salcon Power Corp. (SPC) has decided to exercise its right to top the bid of the winning bidder of the Naga facility, which the government auctioned last year.

SPC, a publicly listed power company, has a 2009 land lease agreement with the government for the Naga facility, which will expire in 2020. It has exercised its right to top by paying PSALM P1.143 billion for the Naga facility.

Prior to this, PSALM has already declared the Aboitiz Group’s Therma Power Visayas Inc. (TPVI) as the winning bidder.  PSALM president Emmanuel Ledesma Jr. issued a notice on April 27 that TVI is the winning bidder of the facility.

SPC confirmed its right to top but is also arguing that it is entitled to the 25-year lease under the agreement between PSALM and TPVI.

However, in a signed opinion May 21, the Office of the Government Corporate Counsel advised PSALM that SPC’s exercise of the right to top the bid cannot extend beyond its current lease on the adjacent area covering the gas turbine in the Naga power complex.