Bidding for Malaya contract fails anew

State-run Power Sector Assets and Liabilities Management Corp., or PSALM, will again offer for bids later this month the P556-million contract to operate and maintain the 650-megawatt Malaya thermal power plant in Rizal.

In a text message to reporters, PSALM president and CEO Emmanuel Ledesma Jr. said that the recent bidding failed because the lone bidder for the Malaya O&M contract SPC Power Corp. was “post disqualified during the first round of bidding.”

SPC Power was disqualified not because of its price offer, but due to some deficiencies in required documents.

To recall, the company submitted an offer that was below the approved budget of P556 million.

For procurements, PSALM usually considers the group with the lowest offer as the winning bidder, unlike in the disposal of power assets and contracted capacities wherein the government seeks the highest offer.

PSALM scheduled a pre-bidding conference for September 13 while the deadline of bid submission would be on September 26. The bids would be opened on the same day.

SPC Power Corp. currently 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. 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.