Power barge auction draws four groups

MANILA, Philippines—Four investor groups are eyeing to acquire the four diesel-fired power barges being auctioned off by the state-run Power Sector Assets and Liabilities Management Corp. for the second time this year.

In a statement issued on Thursday, PSALM said these groups have already completed the initial requirements that the government had set for the privatization of Power Barges 101, 102, 103 and 104, which can generate 32 megawatts each.

PSALM, however, declined to identify the four prospective investor groups, three of which had previously participated in the government’s bidding activities. These four firms, which were all present at the pre-bid conference held yesterday, have submitted letters of interest, paid non-refundable participation fees of $3,000 each, and executed confidentiality agreements and undertakings with PSALM.

According to PSALM, it will still be offering these facilities on Aug. 15 this year in three packages with package 1 combining PB 101 and 102, both of which are currently stationed at Barrio Obrero in Iloilo City; package 2 will cover PB 103, which is moored in Botongon, Estancia, Iloilo; and package 3 for PB 104, currently located at the Holcim Compound, Ilang, Davao City.

The bidding rules require bidders to submit offers for all these three packages.

PSALM added that the transfer of the Visayas-based power barges in Mindanao is still among the conditions for the sale of these diesel facilities. This was despite the sentiments put forward by interested companies about the potential difficulties that they may encounter should they transfer the barges to Mindanao.

And since this will be the second time that PSALM will bid out the four power barges, it pointed out that it will already have the option to enter into a negotiated sale should the Aug. 15 auction fail again.

The first bidding conducted by PSALM on May 16 was declared a failure after receiving only one offer 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 first bidding round, at least seven groups then expressed interest to participate in the bidding, including San Miguel Corp. and the Lopez-led First Gen Corp.

Several groups have earlier expressed apprehension in selling electricity in Mindanao, where rates remain lower than the true cost because the government continues to control 81 percent of the power-generation business in Mindanao.

Industry sources earlier expressed concerns that Mindanao consumers would not support a generation rate that would make the operation of the barges viable, evident in the experience of Aboitiz-led Therma Marine with its two barges in Mindanao.