8 firms vie for Malaya plant O&M contract

By Myrna M. Velasco – Updated May 7, 2018, 12:46 PM
from Manila Bulletin

At least eight firms have advanced interest on the operation and maintenance (O&M) deal for the 650-megawatt Malaya thermal power facility that state-run Power Sector Assets and Liabilities Management Corp. (PSALM) will auction on May 15.

According to a source, seven new prospective bidders will challenge South Korean firm STX Marine Services Co. Ltd. which cornered the O&M contract for the Malaya plant in the past four years.

All eight prospective bidders were present at the pre-bid conference that the state-run company last May 2.

So far, this is the bidding round for the Malaya plant’s O&M deal that had attracted that many prospective takers of the contract.

The new O&M deal will cover September 2018 to 2019 operations of the plant.

Notably, the contract had been reduced to an approved budget cost of P264 million from a previously higher rate of more than P450 million.

The Malaya generating facility is being depended upon by the country’s power system, primarily Luzon grid, as a must-run unit (MRU) – or the facility that the grid operator can call on “for dispatch” when supply runs tight in the system.

That function was most crucial when Luzon grid had been suffering from recurrent strike of strained supply in the years 2013 to 2015, but that hurdle has been easing up so far with new power capacity additions.

Such development in the power system then had been factored in the fresh round of auction for the Malaya plant’s O&M contract, hence, PSALM already opted to trim the cost.

The government, with both the Departments of Finance and Department of Energy taking the lead, had been sorting out privatization plans for the Malaya plant. At this stage, both relevant government agencies are propounding the conduct of study as to the “best option” that can be taken on the plant’s proposed divestment. (MMV)