Naga plant bidding again in peril

State-run Power Sector Assets and Liabilities Management Corp. may have to again postpone the bidding for the management of the contracted capacity of the 146-megawatt Naga power complex, following the intervention of the Joint Congressional Power Commission (JCPC).

“I just received a letter request from the JCPC to defer the bidding of the (independent power producer administrator contract) of the Naga plant. I have not yet received any instructions from the PSALM board on said request,” PSALM president Emmanuel R. Ledesma Jr. said in a text message to reporters.

Ledesma explained that the “JCPC letter provides that the request is ‘in view of various concerns raised about the bidding of the Naga Plant which contains an allegedly unfair and illegal condition known as a right to top the highest bid.’”

“PSALM recognizes the powers of the JCPC as an oversight committee and will defer to the instructions of the PSALM board,” Ledesma insisted. This meant that PSALM still has the last say on whether it will pursue the bidding on Oct. 10.

The request made by JCPC stemmed from the letter sent by House Deputy Speaker Lorenzo R. Tañada III to JCPC co-chairs Sen. Sergio R. Osmeña III and Rep. Henedina R. Abad.

In the letter, Tañada called the attention of the JCPC to the allegedly “anomalous” arrangements in the bidding process for the independent power producer administrator contract of the Naga power complex in Cebu.

In particular, he wanted PSALM to explain the provision under which SPC Power Corp., through a land-lease agreement, was given the “right to top by 5 percent” whatever is the highest bid for the Naga IPPA contract, as no other PSALM asset has this arrangement in the bidding process.

Tañada sought to know whether the land-lease agreement should have also been subjected to competitive bidding.

The lawmaker likewise wanted the JCPC to probe if this arrangement will serve to be a “strong disincentive” to the point that the government will not be able to maximize the privatization value of the Naga complex.

“I find this arrangement anomalous and through the JCPC and in your respective capacities as chairs of the committee of energy of both houses, I seek help in getting answers (to my inquiries),” Tañada said in his letter.

Tañada warned that while PSALM has issued a statement that the right to top was made known to all interested bidders, that “does not change the fact that we might be looking at an arrangement disadvantageous to the government.”