PSALM awards Malaya O&M to Korean company

By Myrna M. Velasco – December 20, 2018, 10:00 PM
from Manila Bulletin

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has awarded the Operation and Maintenance (O&M) service contract to Korean firm Soosan ENS Co. Ltd. for the 650-megawatt Malaya thermal power plant in Pililla, Rizal, according to company president Irene Joy B. Garcia.

PSALM President Irene Joy B. Garcia

Perceptibly, this is the last O&M deal to be entered for the power plant prior to its scheduled full privatization next year.

For the O&M transaction with Soosan, the offer for the contract had been pegged at P208.740 million, which has been declared by PSALM “as within approved budget.”

It must be noted that the allocation of the company for the O&M service contract was at P213 million – which shall be part of its budget for 2019.

The contractor Korean firm is into heavy equipment construction and manufactures plant machinery and electrical equipment.

Until this time, the Malaya plant serves the must-run unit (MRU) need of the power system – although its call for dispatch for such purpose may not be as relevant anymore compared to the time when Luzon grid has been suffering from protracted supply shortages.

PSALM has already indicated to media that it will be divesting the Malaya asset by first half of next year – as this is part of the exercise for it to raise cash to wipe out its still-monstrous debt level.

The mode of privatization is “as is, where is basis” and it will include the land where the thermal plant is currently sited at.

It had been previously proposed by the Department of Energy (DOE) that the asset’s divestment be prescribed with a condition that it shall be converted into a gas-fired power facility, but that has already been abandoned at the launch of the facility’s second round of privatization.

The contentious part of the divestment process for the Malaya plant at this point is drawing the reserve price – which will be the basis of the asset’s privatization value. For that reason, PSALM is engaging a third party consultant for the asset’s prudent appraisal.