P319-M Naga contract bidding fails

STATE-RUN Power Sector Assets and Liabilities Management Corp. declared Friday’s bidding for the P319-million contract to operate and maintain the 146-megawatt Naga power complex in Cebu a failure.

In a text message to reporters, PSALM president and CEO Emmanuel Ledesma Jr. said the government did not receive any offer for the said contract as of the submission deadline on Friday, not even from the lone company that had expressed interest in the contract prior to the bidding.

This is the third bidding conducted by PSALM for the contract to operate and maintain the Naga facilities. The first two, which also failed, were conducted in February and June this year.

Since the bidding falls under the procurement category, PSALM is allowed to proceed with the auction and the awarding of the contract even with only one offer, provided the bid is equal to or lower than the allocated budget and that all other documentary requirements are met.

Left with no other option, PSALM is now looking at extending the contract of SPC Power Corp., which currently maintains and operates the Naga facilities, Ledesma said. The said contract is expiring on Dec. 25 this year.

Ledesma, however, did not disclose how long would the extension be, as the matter had yet to be discussed and approved by the PSALM board.

At present, SPC Power is  in charge of the operation and maintenance of the Naga power plant. Its six-month contract should have expired on Sept. 25, 2012 , but it was extended by another three months.

Prior to that, National Power Corp. and SPC Power had entered into a rehabilitate-operate-maintain-and-manage agreement that expired in March 25 this year.

The Naga complex is composed of three thermal power plants that use a combination of diesel, bunker oil and coal as fuel. These are the coal-fired 50-MW Cebu thermal power plant 1 and 56.8-MW Cebu thermal power plant 2, and the 39-MW Cebu diesel power plant 1.