PSALM to sell Malaya thermal plant ‘as is, where is’
By Lenie Lectura – August 6, 2018
from Business Mirror
THE Power Sector Assets and Liabilities Management Corp. (PSALM) Board has decided to sell the 650-megawatt (MW) Malaya Thermal Power Plant (MTPP) on an “as is, where is” basis, scrapping earlier plans of the Department of Energy (DOE) that supposedly requires the winning bidder to convert the power facility into a liquefied natural gas plant.
PSALM has yet to officially issue a bid invite, but is confident it would meet its target timetable for the privatization of the MTPP, which is “before the end of 2018.
The privatization of Malaya Thermal Power Plant will push through within the year as directed by the PSALM Board following the DOE’s directive that MTPP be privatized on as is, where is basis with the following considerations:
The limited capacity of MTPP may not adversely affect the demand-supply situation in 2019. Hence, MTPP is no longer required by the DOE to run as a must-run unit (MRU) for the next three years after its privatization.
PSALM will exert utmost effort to ensure the remaining capability of operating units can be maximized when needed while the privatization process is ongoing,” said PSALM in an e-mail reply when sought for further details.
PSALM intends to release the bid invites this month, with pre-bid conference scheduled in September. Bidding is targeted in November.
In the past, PSALM postponed the auction for the plant, which was supposed to be sold to four interested bidders who earlier submitted letters of interest. The four bidders are APT Global Inc., Phinma Energy Corp., Riverbend Consolidated Mining Corp. and AC Energy Holdings Inc.
They submitted letters of interest on December 20, 2016. The auction was supposed to take place in March 2017, but was put on hold pending the DOE’s recommendation to the PSALM Board.
With the decision to sell MTPP on as is, where is basis, a source said the state firm will conduct a new round of bidding.
Located in Pililla, Rizal, the MTPP was designated as an MRU by the DOE in 2014. As an MRU, it is compelled to run and provide the needed power supply as deemed necessary in order to ensure reliability of power supply in the Luzon grid, particularly in times of supply shortfall, system security and voltage support.
MTPP was rehabilitated in 1995 by the Korea Electric Power Corp. under a 15-year rehabilitate-operate-manage-maintain agreement. It consists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler.
It will continue operating as an MRU until it is privatized.
The operation and management of the MTPP will be undertaken by Mindoro Grid Corp. for one year starting August 26.
Mindoro Grid Corp. was earlier declared by PSALM as the lowest bidder for the procurement of the Operation and Maintenance Service Contract (OMSC) for the Malaya plant.
The MTPP OMSC has an approved budget of P264 million that will be sourced from PSALM’s 2018 and 2019 Corporate Operating Budgets.
The responsibilities under the service contract include the day-to-day upkeep, management and maintenance or repair of the power plant and its equipment.
The MTPP is being managed by PSALM through an OMSC. The current operator of the power plant is STX Marine Service Co. Ltd., whose contract will expire on August 25, 2018.
