Seven foreign and local firms showed interest in the year-long contract to operate and maintain the 165-megawatt Casecnan hydro power plant in Nueva Ecija, in the run up to its planned privatization in 2022, according to the Power Sector Assets and Liabilities Management Corp. (PSALM)
These include Korean firms Kepco KPS Carabao Corp. and Soosan ENS Co. Ltd. as well as China Energy Engineering Group/Heilongjiang Energy Engineering Co. Ltd.
Also interested are local firms Marine-Power Industry Asia-Pacific Corp., Atdinum Energy Inc., SN Aboitiz Power-Magat Inc. and First Gen Hydro Power Corp.
PSALM said in a statement representatives of these seven companies attended a prebid conference held last Sept. 24.
The state firm’s budget for the operation and maintenance (O&M) service contract was set at P462 million, which will come from PSALM’s corporate operating budget for this year and in 2022.
Bids must be submitted by Oct. 12 as the contract will become effective for one year starting Nov. 26, during which PSALM will be preparing for the facility’s privatization.
BOT project
The power plant was developed in the 1990s as a Build-Operate-Transfer (BOT) project by CE Casecnan Water and Energy Co. Inc. (CEWEC), a unit of the US based CalEnergy group of companies.
A component of the Casecnan Multipurpose Project, the power plant started operations in 2002 through a 20-year cooperation with the National Irrigation Administration (NIA).
The BOT arrangement will end this coming Dec. 11, when the facility will be turned over to NIA and PSALM as joint owners. On Dec. 12, the contractor that will win the October bidding will be the new operator of the power plant.
“The procurement of an O&M operator will ensure the continuous generation of energy as well as the uninterrupted irrigation service of the Casecnan project upon Casecnan’s turnover from the CEWEC to the government on Dec. 11,” PSALM president and chief executive Irene Besido-Garcia said.
The irrigation and power generation complex is located at Sitio Pauan in Barangay Villarica, Pantabangan, Nueva Ecija.
There are two run-off weirs and intake structures built along the Casecnan and Taan Rivers, located in Alfonso Castañeda town, in neighboring Nueva Vizcaya.
According to PSALM, included in the terms of the O&M contract for the power plant is a set of water protocols—prepared by NIA—that will guarantee that the irrigation component of the Casecnan project will continue.
This is meant to ensure that farmers benefiting from the irrigation water coming from Casecnan will not be adversely affected by the shift of ownership of the power plant and the engagement of a new operator.
Based on PSALM’s privatization timeline and pursuant to the Electric Power Industry Reform Act of 2001, the Casecnan project needs to be sold by 2022. INQ