Minimum bid price for Malaya plant set

By Jordeene B. Lagare – September 18, 2020
from The Manila Times

THE minimum bid price for the sale of Malaya Thermal Power Plant (MTPP) and its underlying land was lowered to P2.2 billion, the Power Sector Assets and Liabilities Management Corp. (Psalm) said.

In a statement, the state-run corporation said its board of directors arrived at the minimum bid price of P2,188,400,000 for the aforementioned power asset after taking into consideration various valuation methodologies and relevant factors.

“These include the book value of the asset, the zonal value of the land, the substantial losses incurred and continue to be incurred by Psalm in maintaining the MTPP, the effects of the (coronavirus disease 2019) Covid-19 pandemic on marketability, the electricity demand, and the need to have a justifiable price that would lead to a successful public bidding,” it added.

Psalm submitted the minimum bid price to the Commission on Audit last August 25, along with the supporting documents and the detailed explanation.

“There were many considerations that had to be looked into by the Psalm Board in setting the minimum bid price, but foremost is the need to arrive at a fair and reasonable minimum bid price that would actually lead to a higher probability of a successful privatization. We need to privatize the Malaya Power Plant this year so that the proceeds of the sale can be used to settle maturing obligations this year and minimize Psalm’s borrowings,” Psalm President and Chief Executive Officer Irene Joy Garcia said.

Third party consultant, Isla Lipana and Co. Pricewaterhouse Cooper Global Network, assisted in the activity.

All interested parties are given until September 23 at 12 noon to submit their respective proposals. The opening and evaluation of bids will immediately commence.

Proposals are to be submitted at Psalm’s office in Vertis North in Quezon City.

To recall, the state-led firm conducted two rounds of public bidding for the 650-megawatt thermal power plant located in Pililla, Rizal on Sept. 18, 2019 and Nov. 22, 2019, respectively.

However, both bidding exercises were declared a failure due to the lack of interested bidders.

Following the second round of bidding, Psalm proceeded with a negotiated sale with the lone bidder. But it was also declared a failure after receiving a bid price below the minimum bid price set for these assets.

At that time, the minimum bid price in the last public bidding as well as in the negotiated sale was P4,482 billion.

Currently, the Malaya plant is dispatched as a must run unit (MRU) by the National Grid Corp. of the Philippines. It shall operate and provide security capacity during shortage in electricity supply caused by power plant outages to ensure system reliability of the Luzon grid.

However, once privatized, the power facility is no longer required to run as an MRU as ordered by the Department of Energy.

Land assets up for grabs
Meanwhile, Psalm said two entities are keen on acquiring two of its five small-value real estate assets that are being sold.

Psalm said Santa Clara Power Corp. expressed its interest on the Loboc property in Bohol while Cagayan II Electric Cooperative, Inc. (Cagelco) was interested in the Camalaniugan property in Cagayan.

Currently, the state-led firm is auctioning five real estate properties located in General Santos City, Loboc, Magdalena, Sudipen, and Camalaniugan.

Psalm conducted on Tuesday a pre-bid conference which gave interested parties an avenue to ask about the sale provisions as well as the process being followed in the privatization of these assets.

Bid submission deadline is scheduled on September 30 at 2 p.m., after which the opening and evaluation of bids will immediately commence. All proposals are to be submitted at Psalm’s office.

The 1,868-square-meter (sq m)asset in General Santos City is near the shoreline of Calumpang and in close proximity to an industrial zone. The minimum bid price is P10.974 million.

The Loboc property in Bohol is composed of four lots with a total land area of 13,204 sq m. The real estate asset, near the scenic Loboc River which is a bustling tourist site, has minimum bid price of P12.139 million.

The land in Magdalena, Laguna is made up of 20 lots totaling 270,390 sq m. The area, which straddles four barangays, is a prime agricultural location. It is highly accessible because of the several access roads available. The minimum bid price is set at P27.039 million.

The property in Sudipen, La Union, which has three lots with total area of 2,041 sq m, is situated close to the main road of the municipality. The minimum bid price for the property, conducive for agro-industrial activities, is P3.171 million.

Lastly, the lot in Camalaniugan in Cagayan, measuring 2,148 sq m, is located in a residential zone, making it ideal for residential development. The minimum bid price is 3.22 million.

The Malaya plant and the five properties are some of the power assets being auctioned by Psalm to settle financial obligations that it assumed from the National Power Corp.