Power Sector Assets and Liabilities Management Corp. (PSALM) yesterday announced that Mindoro Grid Corp. (MGC) submitted the lowest offer for the contract to operate and maintain the 640-megawatt Malaya Thermal Power Plant in Rizal province.
MGC operates two diesel-fired power plants in Oriental Mindoro, one 6.6-MW generator in Calapan City and another in Bongabon town.
PSALM said MGC offered its services for P227 million for a one-year contract, outbidding its lone rival—South Korean firm Soosan ENS Co. Ltd.—which quoted P258.7 million.
The state firm has a budget of P264 million for the Malaya contract, which will come from its operating budgets for both this year and 2019.
According to PSALM, MGC would undergo post-qualification evaluation before the service contract can be awarded, following the law on government procurement.
The winning bidder will be responsible for the day-to-day upkeep, management and maintenance or repair of the Malaya power plant and its equipment.
The Malaya power plant is currently being overseen by STX Marine Service Co. Ltd.—another South Korean firm—but its contract will expire in less than three months on Aug. 25.
The four-decade old power plant underwent rehabilitation in 1995 through a 15-year rehabilitate-operate-manage-mantain agreement with Korea Electric Power Corp.
In 2014, the Department of Energy designated the Malaya plant as a “must-run unit,” which means that the facility 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.”
Earlier this year, PSALM said it was bent on finally pushing through with the privatization of “expensive” assets this year, particularly the Malaya plant as well as the 210-MW Mindanao coal-fired plant in Misamis Oriental.
Bidding for the Malaya contract had been deferred as the Department of Energy had considered the conversion of the oil-fired facility into one that runs on liquefied natural gas.
PSALM said it wanted to cut on operational costs and to augment funds for paying off the financial obligations it assumed from National Power Corp.