PSALM launches bid to sell Malaya power plant in Rizal
By Lenie Lectura – October 6, 2020
from Business Mirror
The Power Sector Assets and Liabilities Management Corp. (PSALM) has commenced the negotiated sale process for the 650-megawatt (MW) Malaya Thermal Power Plant (MTPP) and its underlying land in Pililla, Rizal.
The state firm released an invitation to negotiate and submit offer following its third failed bid attempt last September 24.
“The PSALM Bids and Awards Committee invites interested parties to join the negotiated sale process and thus submit offers for the privatization of the MTPP, and the land underlying the plant,” PSALM said.
From the original MBP offer of P4,481,796,017, PSALM has reduced this to P2,188,400,000 and further to P2,007,780,000 for the negotiated sale process. An offer lower than the minimum bid price will be rejected outright.
Interested parties must submit a letter of interest not later than October 22.
There will be a pre-negotiation conference scheduled on October 23 before the deadline for the bid submission on November 16.
AC Energy Philippines Inc. (AC Energy) President Eric Francia said in a text message that the company is “unlikely” to participate this time.
AC Energy and Panasia Energy Inc. (Panasia) have prequalified for the auction but later decided to not participate.
“Given the significant amount of the Reserve Price provided under SBB No. 11 dated September 11, 2020, the purchase of the Assets is not financially viable for Panasia,” Panasia had told PSALM.
AC Energy, meanwhile, submitted to PSALM a letter expressing regret that it will not be able to participate. “In our attempt to meet the Minimum Bid Price, we have factored in all the possible material considerations. Unfortunately, despite the said efforts, we are unable to meet the same.”
PSALM already rationalized and lowered the minimum bid price of Malaya in the hope that the bidders would be encouraged to submit their bids.
“It is regrettable that despite the reduced minimum price, still no bidder submitted a bid,” PSALM President and CEO Irene Besido-Garcia had said. “PSALM must exhaust the available legal process to dispose Malaya because we are incurring substantial losses in continuously maintaining it.”
Based on the losses from 2010 to 2019, the average annual net loss of PSALM in maintaining the Malaya facility is P1.207 billion. It was declared a “must run unit” in 2014. The average annual net loss of PSALM if based on the years that it is running as a must run unit (2015 to 2019) is P556.2 million.
As an MRU, it is called by the National Grid Corp. of the Philippines to run and provide security capacity during shortage in electricity supply caused by power plant outages to ensure system reliability of the Luzon grid.
In 2019, PSALM conducted two rounds of bidding for the sale of said assets which were declared “failed” due to lack of interested bidders. It can be noted that PSALM proceeded to a negotiated sale with the lone bidder of the then second round.
