The Philippine government has finally privatized the operations of the 218-megawatt (MW) Angat Hydroelectric Power Plant (HEPP)—more than four years after it was auctioned off.
During a ceremony Friday night, Power Sector Assets and Liabilities Management (PSALM) Corp. president and CEO Emmanuel R. Ledesma Jr. said that the state firm was at last turning over control of Angat HEPP to Korea Water Resources Corp. (K-Water), after overcoming various hurdles since the auction was held in April 2010.
“With K-Water’s payment of the purchase price, government can finally close the highly anticipated sale of the Angat HEPP. The actual turnover of operations of the Bulacan-based hydro plant to its new owner will commence at 2400 hours of Oct. 31, 2014,” Ledesma said.
He confirmed that the state firm had received K-Water’s full payment of the final purchase price for the Angat HEPP last Friday.
The Angat Dam in Bulacan. PHOTO FROM BULACAN.GOV.PH
The government has agreed to a discounted price of about $439 million, from the original $441 million, due to the facility’s condition, which deteriorated during the years the turnover was pending.
San Miguel Corp. is expected to sign on as the main local partner. But according to K-Water president Choi Gyewoon, talks with the local conglomerate have not been finalized.
K-Water won the bid conducted by PSALM for the Angat HEPP on April 28, 2010 offering almost $441 million for the facility, besting five other bidders:
First Gen Northern Energy Corp. (with an offer of $365 million); San Miguel Corp. ($312.50 million); SN-Aboitiz Power Pangasinan, Inc. ($256 million); Trans-Asia Oil & Energy Development Corp. ($237 million); and DMCI Power Corp. ($188.89 million).
The Supreme Court, however, suspended the asset sale on May 24, 2010 when it issued a status quo ante order, citing a complaint filed by Initiatives for Dialogue and Empowerment through Alternative Legal Services (Ideals) Inc., et al. The petitioners questioned the legality of PSALM’s bid conduct for the Angat HEPP. But on Oct. 9, 2012, the high court upheld the legality and validity of the conduct of the bid proceedings and the subsequent issuance of a Notice of Award to K-Water.
Despite a motion for partial reconsideration lodged by Ideals Inc., the Supreme Court en banc upheld its decision and resolved to deny the motion “with finality” on Nov. 13, 2012.
With the high court clearance, PSALM issued the Certificate of Effectivity of the Asset Purchase Agreement (APA) to K-Water on Sept. 2, 2013, effectively setting in motion the closing of the sale. K-Water posted the required performance bond worth almost $8.82 million on Sept. 12, 2013.
Located in San Lorenzo, Norzagaray in Bulacan, the Angat HEPP consists of four main units, each with a 50-megawatt (MW) capacity. The units were commissioned between 1967 and 1968.
“The sale merely involves the power plant component of the Angat Dam,” Ledesma reiterated. “The privatization of the Angat HEPP will not affect the water supply from the Angat reservoir as the Angat Dam remains the property of the Philippine government.”