SPC likely to get Malaya plant contract

The Malaya power plant: Only one bidder PHOTO FROM PILILLAONLINE.COM

State-run Power Sector Assets and Liabilities Management Corp. (PASALM) received only one offer to operate and maintain the 650-megawatt Malaya thermal power plant in Rizal for a year.

“Salcon Power Corp. was the lone bidder with a bid below the approved budget for the contract. [The awarding] of the contract is subject to a detailed bid evaluation and post-qualification,” said PSALM president and CEO Emmanuel Ledesma Jr.

PSALM conducted the bidding last Friday and had set a floor price of P556 million for the operation and maintenance contract for the Malaya power plant.

Salcon Power, now called SPC Power Corp., operates and maintains the Malaya power plant under a one-year operation and maintenance contract, which is set to expire in October this year.

It is crucial for PSALM to be able to award an O&M contract to ensure the continued operation of the Malaya thermal plant, which is considered a crucial energy facility since it provides the much-needed additional capacity for the Luzon grid when some of the island’s baseload power plants are not producing either due to forced outages or preventive maintenance activities.

The Malaya power plant was acquired in the mid-1970s by the state-owned National Power Corp. After 20 years, Korea Electric Power Corp. (Kepco) started rehabilitating the facility after it won the international bidding for the rehabilitation, operation, maintenance and management contract conducted by Napocor. It was under Kepco’s management that the power plant was able to operate at its original rated generation capacity of 650 MW. The contract, however, expired in 2011.

SPC Power then took over, having won the contract to operate and maintain the facility in October 2011.

Also last Friday, PSALM again failed to sell four diesel-fired power barges after Trans-Asia Oil and Energy Development Corp. was not able to match the reserve price for all the facilities.

Ledesma Trans-Asia Oil decided not to match the reserve price and the difference with the offer presented by the Phinma-led company was “substantial.” Trans-Asia Oil quoted a price of P43.83 million for Power Barges 101 and 102; P1 million for Power Barge 3 and P50.13 million for Power Barge 4, or a total of P95 million. PSALM, however, did not disclose the reserve price for the assets.

This was the second time that PSALM attempted to sell the power barges and failed.

The first bidding held in May this year was considered a failure after PSALM received only one offer from ACTA Power Corp., a joint venture between the Ayala group’s AC Energy Holdings and Trans-Asia Oil.

The second bidding was held Friday, but was declared a failure after receiving again only one offer, this time from Trans-Asia Oil. PSALM was expecting two other groups to submit offers, namely First Gen Visayas Energy Inc. and Oriental Energy and Power Gen Corp., but these firms were not present during Friday’s bidding.

Immediately after the declaration of a failed bidding at noon Friday, Ledesma said the PSALM board gave its go-ahead for PSALM to enter into negotiations with Trans-Asia Oil for the sale of Power Barges 101 to 104.

The failure to sell the barges even under the terms of a negotiated bid may worsen the expected critical power situation in Mindanao by the summer of next year as the government sees a 200-megawatt supply shortage on the electricity-starved island.

The government has been banking on these power barges to provide the much-needed capacity in Mindanao by 2013.