Korean firm bags new O&M contract for Malaya plant

By Myrna M. Velasco – September 2, 2017, 10:01 PM

from Manila Bulletin

Korean firm STX Marine Service Co. Ltd. was given another one-year contract on an operation and management (O&M) deal for the 650-megawatt Malaya thermal power facility.

State-owned Power Sector Assets and Liabilities Management Corporation (PSALM) announced that the new O&M pact would last from August 25 this year to August 25, 2018.

PSALM remains the state-run entity owner of the Malaya plant as the government is still in the process of deciding on its appropriate privatization design.

For the new deal with STX Marine, PSALM noted that the contractor’s responsibilities shall include “day-to-day upkeep, management, and maintenance or repair of the power plant and its equipment.”

The power plant is already at its “retirement phase,” hence, operating it would already be posing multiplicity of challenges.

Malaya has two generating units – one of which is of 300MW capacity with once-through type boiler; and the other is a 350MW unit fitted with conventional boiler.

The plant has been designated as a must-run unit (MRU), enabling the government to call on it for dispatch if there is abrupt tightness in power supply in the grid, primarily if some plants would suddenly suffer forced outages.

The facility has long been lined up for privatization – the last attempt was earlier this year; but plans changed when Energy Secretary Alfonso G. Cusi proposed its conversion into a liquefied natural gas-fired facility as a condition to the winning bidder.

Since such proposition called for material change in the terms of reference in the privatization package, PSALM with the imprimatur of its board, just eventually decided to defer the plant’s sale process.

Until this time, the asset-seller firm is still finding its way on to resuming the auction process for the Malaya plant, leaning on modified stipulation to have the asset shift its fuel and technology use to gas.