SC rules with finality on Naga power plant

CEBU, Philippines - The Supreme Court has upheld its ruling to award the 153.1-megawatt Naga Power Plant Complex to Therma Power Visayas Inc. (TPVI), a unit of Aboitiz Power Corp.

In a disclosure to the Philippine Stock Exchange yesterday, Aboitiz Power said TPVI had received on Feb. 14 the SC's Entry of Judgment on the case dated January 9, 2017.

"The Notice of Award dated April 30, 2014 in favor of Therma Power Visayas Inc. is hereby reinstated, excluding the portion therein granting to SPC (Power Corp.) the Right to Top," read a portion of the SC entry of judgment.

The SC ruling further directed the Power Sector Asset and Liabilities Management Corp. (PSALM) to execute the Asset Purchase Agreement (APA) and the Land Lease Agreement (LLA) for the said power plant "in favor of TPVI with dispatch."

SPC has a pending motion for leave to file and admit motion for reconsideration dated December 9, 2016 with the SC, the Aboitiz disclosure said.

It can be recalled SPC's motion for reconsideration came after SC denied with finality in a November 28, 2016 decision its urgent motion for the high tribunal to reconsider its decision to reinstate the award.

The SC had ruled the bidding for the 153.1-MW Naga plant was valid but it invalidated the condition in the bidding granting SPC the right to top the bid.

The court also annulled and set aside the APA and LLA between PSALM and SPC.

At the time when it filed the motion, SPC said it was still operating the Naga power plant.

In a October 5, 2016 ruling, the SC first ordered the reinstatement of the Notice of Award dated April 30, 2014 issued by PSALM.

In 2009, SPC acquired through a negotiated bid the 55-MW Naga land-based Gas Turbine Power Plant in Colon, Naga City, Cebu.

In the same year, it entered into a LLA with PSALM, which includes SPC’s right to top the price of a winning bidder for the sale of any property in the vicinity of the leased premises. PSALM subsequently bid out the Naga Plant located in the leased premises.

On April 30, 2014 and after two failed biddings, PSALM issued a Notice of Award to TPVI for submitting the highest bid for the Naga plant.

SPC wrote PSALM of its intent to exercise its right to top the winning bid, on the condition that the LLA would be for a term of 25 years from closing date. PSALM then awarded the contract to SPC, despite TPVI’s objections that SPC did not validly exercise its right to top because of its qualified offer.

Senator Sergio Osmeña III then filed a petition with the SC seeking to enjoin PSALM from awarding the Naga plant on the grounds that SPC’s right to top was void.

On September 28, 2015, the SC canceled the award to SPC on the finding that SPC’s right to top is void for lack of interest or right to the object over which the right to top is to be exercised.

In its previous response to various motions, the SC had clarified the nullification of SPC’s right to top did not invalidate the entire bidding process.

On Wednesday, shares of Aboitiz Power were at P42.75 apiece in morning trading, while those of SPC were at P4.20 apiece. (BANAT NEWS)