PSALM bids out contract to run Malaya thermal plant

MANILA, Philippines—The state-run Power Sector Assets and Liabilities Management Corp. is seeking offers for a P556-million contract to operate and maintain the 650-megawatt Malaya thermal power plant in Pililia, Rizal.

In a notice, PSALM said it would be bidding out the one-year contract on August 17 through open competitive bidding procedures using a non-discretionary “pass or fail” criterion.

A pre-bid conference has been set for August 2 for interested parties, who will need to purchase bidding documents from PSALM and pay a non-refundable fee of P75,000.

PSALM needs to have an operations and maintenance agreement for the Malaya thermal facility as the government plans to hold on to the facility until the natural gas industry has been established. This diesel-fired power plant is being eyed by the Department of Energy for conversion into a natural gas facility so it can fetch a higher price when sold to the private sector.

Energy Secretary Jose Rene D. Almendras earlier said the Malaya facility may help provide the anchor load for the proposed $2.1 billion Batangas-Manila natural gas pipeline project.

According to Almendras, plans to bid this diesel plant remained on hold until the plans for the BatMan 1 gas pipeline have already been finalized.

If the Malaya facility is sold now, its value will be pegged to its real estate value. But selling this diesel plant with a guarantee that the natural gas pipeline will be there, then that’s a real power investment, Almendras had said.

The proposed BatMan 1 gas project, which will be spearheaded by the state-run Philippine National Oil Co., will be implemented in three phases.

Phase 1 will involve the construction of a $200-million gas pipeline, which the government will undertake, while the second and third phases will involve the construction of the receiving terminal and a 600-megawatt power plant to serve as anchor load. The last two phases will be bid out to interested private sector parties and consortia.

The Philippine government is bent on pursuing the massive use of alternative fuels such as natural gas given the current global oil price volatility, to which the Philippines is highly vulnerable as it sources more than 90 percent of its fuel requirements abroad. Natural gas has been deemed to be among the more feasible alternatives that will allow the country to diversify its energy and transport fuel sources.