Firms under dispute with PSALM can’t bid for Malaya plant
By Myrna M. Velasco – October 7, 2018, 10:00 PM
from Manila Bulletin
The terms of reference (TOR) being cast for the sale of the 650-megawatt Malaya thermal power facility will prescribe that companies under dispute with asset-seller Power Sector Assets and Liabilities Management Corporation (PSALM) are disqualified from joining the bidding.
PSALM President
Irene Joy B. Garcia
This was clearly laid down by PSALM President Irene Joy B. Garcia, with her emphasizing that such shall include those with pending legal suits, or if the company has lodged some receivables with that particular firm or investor-group.
“If there is any dispute with PSALM – or if there are any payables or any pending suits, then we will not allow them to participate in the bidding… that will be reflected in the terms of reference,” she stressed.
In a tender notice issued by the state-run company on Friday, it stipulated that it will accept letters of interest (LOIs) from interested parties starting October 5 until November 19 this year, while bid opening is slated on December 14.
“Only interested parties who submitted LOIs will be allowed to participate in the privatization of the assets,” the company said.
The energy investment arm of San Miguel Corporation had been among the first to sound off interest on the asset, but according to PSALM sources, “it will likely be disqualified from joining the bidding because of the pending legal suit we have with them on the Ilijan plant contract.”
Garcia indicated that the bidding for Malaya plant’s sale is targeted within this year – following the completion of “valuation process” that may either be undertaken by the Development Bank of the Philippines (DBP) or a third party firm that has expertise in appraising power plant assets.
“We need to do the valuation first, so once we are able to set the timetable for the valuation, we will coincide the rollout of dates for the bidding of Malaya,” the PSALM chief executive emphasized.
She opined that the mode of divestment being thought out will likely turn out attractive to the bidders – because aside from selling the asset on “as is, where is basis,” they already scrapped the proviso on having the plant delegated as “must run unit” for at least three years.
As a must-run unit, the Malaya plant shall be cast as a standby facility that the grid operator can call on for dispatch if there’s supply gap or power scarcity in the Luzon grid. That has been a function deputized to that particular asset under the government’s charge.
“It will be ‘as is, where is’, and there’s no more three-year must-run period. Before there was an instruction from the DOE (Department of Energy) to put a must-run provision,” Garcia qualified.
