PSALM, SPC in talks over crucial Naga facility

State-run Power Sector Assets and Liabilities Management Corp. is negotiating a six-month contract with SPC Power Corp. for the continued operation of the 146-megawatt Naga power plant complex in Cebu.

In a statement, PSALM stressed the need to have in place a temporary Operation and Maintenance Service Contract (OSMC) to ensure the continued supply of power from the Naga facility to the Visayas grid.

“Entering into an operation and maintenance service contract with SPC will allow minimal disruption of the Naga power plant’s operation as SPC is currently operating the complex pursuant to its outstanding contract with the National Power Corp. (Napocor),” said PSALM president and chief executive officer Emmanuel R. Ledesma Jr.

SPC is the current operator of the Naga facility. However, the rehabilitate-operate-maintain-and-manage agreement between Napocor and SPC is set to expire on March 25.

To head off potential disruptions, PSALM earlier sought the services of another operator for the Naga complex. But the first auction was declared a failure by the PSALM bids and awards committee when no bid was received last February 27. PSALM is set to conduct a second round of bidding for a one-year OMSC.

Meanwhile, Ledesma stressed that the negotiated procurement with SPC Power does not preclude PSALM from pursuing the privatization of the Naga power plant complex.

PSALM was supposed to auction off the independent power producer administrator contract covering the Naga power complex in October 2011.

But the agency gave way to the Joint Congressional Power Commission (JCPC) when it requested PSALM to defer the bidding pending review of the “right to top the highest bid” granted to SPC Power Corp. in 2009.