Energy Secretary Jose Rene D. Almendras said the government would not tweak the rules governing the auction of four diesel-fired power barges despite requests for modification by prospective bidders.
Under the rules, winning bidders are required to transfer the facilities to Mindanao after the award of the barges. A number of bidders, however, are not so keen on operating in Mindanao.
In a briefing, Almendras said the facilities must be transferred to Mindanao where additional generating capacity was required.
He said he had asked state-run Power Sector Assets and Liabilities Management Corp. (PSALM) to review the bidding terms and come up with a more attractive package that would entice the private sector to participate in the bidding.
Being offered to the private sector are Power Barges 101, 102, 103 and 104, which are mostly in the Visayas.
According to Almendras, private power generators, who have earlier expressed interest in these facilities, have decided not to participate in the bidding last month because of the said requirement.
“Apparently, some of the bidders are afraid to go to Mindanao,” Almendras said. “But we are not going to change the rules. I think the price will be affected because of that consideration. We have to make it (package) more attractive to convince them to move to Mindanao.”
He earlier said the four power barges, which could generate 32 megawatts each, would be crucial in helping avert a possible 200-MW shortage in Mindanao by summer of next year.
PSALM declared the bidding it held on May 16 for the barges a failure after only one company submitted an offer. The lone bid came from ACTA Power Corp., a joint venture between the Ayala Group’s AC Energy Holdings and the Phinma-led Trans-Asia Oil and Energy Development Corp.
Prior to the bidding, at least seven groups expressed interest to participate, including San Miguel Corp. and First Gen Corp.
The reason for their non-participation, according to sources, was their concern that Mindanao consumers would not support a generation rate that would make the operation of the barges viable given the experience of the Aboitiz-led Therma Marine. The latter, which owns and operates Power Barges 117 and 118, had difficulties in forging power supply deals because the cost of power generated by the diesel plants was much higher than the electricity churned by the hydropower complexes in the region.
The winning bidder was also required to shoulder the cost of transferring the barges and the repair of their mooring sites.