PSALM seeks bids to supply P488M worth of coal

State-run Power Sector Assets and Liabilities Management Corp. (PSALM) is seeking bids to supply and deliver P488 million worth of coal that will fuel the 146-megawatt (MW) Naga power complex in Cebu.

According to company documents, PSALM needs to secure 84,000 metric tons of local blended coal for the Naga power complex.

Interested bidders have until May 8 to submit their offers to PSALM.

PSALM has conducted several auctions for contracts to supply coal for the Naga power complex, but has yet to announce the results.

Last month, PSALM sought offers for the supply and delivery of 104,000 MT of steaming coal worth P722 million, following a failed bidding in March.

In February, PSALM also conducted a bidding for 55,000 MT of imported steaming coal and 85,000 MT of local blending coal worth a combined P868 million.

PSALM is mandated by law to procure the fuel requirements of all government owned power facilities and contracted capacities, while awaiting their privatization—as in the case of the Naga power complex.

PSALM has yet to privatize the contracted capacity of the Naga facilities, after it postponed the bidding for the independent power producer administrator (IPPA), originally scheduled for October 2011.

PSALM had decided to grant the request of the Joint Congressional Power Commission (JCPC) to defer the bidding as it wanted to further review the “right to top the highest bid” granted to SPC Power Corp. in 2009 through a Land Lease Agreement executed by PSALM, National Power Corp. and SPC.

Under the agreement, SPC has the right to top by 5 percent the highest bid price offered by interested parties for the IPPA contract.

The land lease agreement, which contains the questioned provision, stemmed from SPC’s acquisition of the 55-MW Naga land-based gas turbine (LBGT) power plant in 2009.

The agreement was provided then as an incentive to the winning bidder of the Naga LBGT, giving it the “right to top the highest bid” on the sale or lease of the properties within the vicinity, on condition that it pays a premium of 5 percent.

The 146-MW Naga power complex is within the LBGT Plant complex.