SMPC presses ‘cost claims’ vs GE on Calaca plant shutdown
By Myrna M. Velasco – May 4, 2021, 6:30 AM
from Manila Bulletin
Consunji-led Semirara Mining and Power Corporation (SMPC) is pressing its ‘cost claims’ against its equipment supplier – American firm GE, on the extended shutdown of unit 2 of its 600-megawatt Sem-Calaca coal-fired power facility in Batangas.
SMPC President Maria Cristina C. Gotianun said their company is in negotiations with GE, for the latter to shoulder all costs relating to the needed fix in the generator of the Calaca power facility.
“While they have agreed to cover the majority of the costs related to fixing the equipment, we are intent on making them shoulder all the necessary expenses,” she stressed.
Gotianun has not given exact figure on the cost-claims being sorted with GE, but she qualified that they are eyeing completion of negotiations within the year.
And while the Sem-Calaca Power Corporation (SCPC) plant is on that tangled technical dilemma, the SMPC President indicated that “we are doing our best to fast-track the repair of the generator.”
On the whole though, the expectation of the Consunji-led firm would still be “disappointing results” for SCPC Unit-2, given the fact that the facility had been on forced outage since December 3 last year.
“The outage was caused by the breakdown of its 7-month old generator stator,” Gotianun said, noting that the technical glitch happened following the completion of the life extension program for both units 1 and 2 of the Calaca plant.
Beyond the SCPC generating unit that is on stretched downtime, SMPC is expecting to register better financial outcome this year from its other power plant – the Southwest Luzon Power Generation Corporation (SLPGC), as well as its coal mining operations in Semirara.
“This year, we expect our coal business to perform better on the back of recovering consumption and prices,” Gotianun asserted, while adding that the remedial measures done at the Molave North Block-7 of their coal mine will enable the company to hit annual production of 13 million metric tons this 2021.
On the power generation side of the company’s business, she pointed out that “to better manage our market exposure, we have contracted out majority of our dependable capacity.”
SMPC Chairman Isidro A. Consunji similarly stated that for this year, “we expect some improvements on our bottom line as the coal and electricity markets recover from last year’s historic lows.”
Nevertheless, he qualified that “given our operational headwinds and until our country reaches herd immunity, it is unlikely that we will return to our pre-pandemic profit level this year.”
Consunji noted that one of the accomplishments they can consider, despite their challenging operations last year, had been the company’s dividend declaration of P1.25 per share and paid to qualified stockholders last April 23. “That translated to a payout of P5.3 billion, for a dividend payout ratio of 163-percent,” with him expounding that “100-percent of our cash dividend came from our retained earnings and no debt was incurred to fund this payout.”
