San Miguel Corp. has offered to pay two years in advance P22.68 billion in capacity charges for its contract to manage the 1,200-megawatt Ilijan power plant to “help debt-ridden” state firm Power Sector Assets and Liabilities Management Corp. (PSALM) and the government raise funds.
SMC president Ramon Ang said this offer was separate from the “alleged overdue receivables” from subsidiary South Premiere Power Corp. (SPPC), which PSALM insisted amounted to P23.9 billion.
Ang said he had expressed in a letter to PSALM such offer to fully pay power plant capacity charges that SPCC was obliged to pay for the remainder of an independent power producer administrator contract with PSALM.
As for what PSALM considers as overdue payments, Ang reiterated that this was the subject of a case pending in court since 2015.
He said this had stemmed from differences in computing generation charges, with SPCC rejecting PSALM’s way of computation.
“While we have an ongoing court case with PSALM regarding the computation of generation fees for the Ilijan plant, as a stakeholder in the power industry, and more importantly, a proactive partner of the government in nation-building, we sincerely want to help PSALM raise funds for government,” Ang said in a statement.
“Right now, the best and quickest way we can do this ahead of a decision on our case, is to fully pay the P22.6 billion balance in capacity charges of SPPC for the Ilijan power plant, in full,” he added.
Citing the IPPA contract, Ang said SPPC was supposed to pay PSALM fixed monthly payments up to June 2022. SMC, through SPPC, originally won the bidding for the Ilijan plant for $870 million.
Ang said that by the end of the contract in 2022, SPPC would have paid P392 billion for the Ilijan plant, equivalent more than double the plant’s bid price of $870 million.
“We have to let the courts decide on the case and let due process take its course. Both the Supreme Court and the Court of Appeals have already said it is the Mandaluyong RTC that has jurisdiction over the case,” Ang said. “Let’s not muddle the facts and confuse the public.” INQ