PCC OK needed for winning Malaya plant bid

MANILA, Philippines — The sale of the 650-megawatt Malaya Thermal Power Plant (TPP) would need the approval of the Philippine Competition Commission.

In its latest supplemental bid, Power Sector Assets and Liabilities Management Corp. (PSALM)  said the privatization of the Malaya TPP falls under acquisitions as defined under Republic Act 10667, otherwise known as the Philippine Competition Act.

The bidding is expected to start next month.

“Once the winning bidder is already determined, PSALM and the winning bidder would need to observe and abide by the PCC’s guidelines, particularly on the compulsory notification or non-coverage requirement, whichever is applicable,” PSALM said.

Under the implementing rules and regulations of PCC, parties to a merger or acquisition are required to notify the PCC if the size of the party exceeds P5 billion, and if the value of the transaction exceeds P2 billion.

Meanwhile, PSALM also moved anew the bid submission deadline for the Malaya TPP to Sept. 18 from Sept. 12.

PSALM said moving the deadline was  “imperative and necessary in order to accommodate the mandatory review of Office of the Government Corporate Counsel (OGCC) on all of PSALM’s privatization documents.”

Under the new OGCC requirement, PSALM needs to enter into an asset purchase agreement (APA) with the winning bidder of the Malaya assets.

PSALM president and chief executive officer Irene Joy Besido-Garcia earlier said the agency is coordinating with the OGCC to secure clearance on the provisions of the APA.

The Malaya TPP was originally scheduled for privatization in March 2017, but it had been deferred many times after the Department of Energy  (DOE) proposed to convert it into a liquefied natural gas plant.

The plant, which currently runs on diesel, was designated as a must-run unit (MRU) to address supply deficiency when operating power plants in the grid suddenly bog down or become unavailable.

It will operate as an MRU until the DOE finalizes its privatization schedule.

After changing the terms of reference, PSALM then set the sale of the power asset in December 2018, but the PSALM board decided to push back the privatization anew since there is no basis for a base price yet.

Last June, PSALM engaged PricewaterhouseCoopers (PwC) Philippines to do the valuation of the Malaya TPP and its underlying land after two failed public biddings and four failed negotiated procurements

It was scheduled to present the results of its valuation to the PSALM board this month, the same day of the conduct of the public bidding for the Malaya TPP and its underlying land.

Located in Pililia, Rizal, it consists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler.

It was last rehabilitated in 1995 by Korea Electric Power Corp. under a 15-year rehabilitate-operate-manage-maintain agreement.