ABOITIZ POWER Corp. said in Thursday that its subsidiary had received regulatory certification to initiate the purchase of a power plant in Naga City, Cebu.
In a disclosure to the stock exchange, AboitizPower said the certificate of effectivity issued by Power Sector Assets and Liabilities Management Corp. (PSALM) to Therma Power Visayas, Inc. (TPVI) “implements the Sept. 28, 2015 decision of the Supreme Court, which upheld the April 30, 2014 award of the facility to TPVI.”
“We appreciate the decision of PSALM and we look forward to operating the facility and contribute to securing the energy needs of the Visayas,” AboitizPower President and Chief Operating Officer Antonio R. Moraza said in a statement.
AboitizPower said PSALM issued a notice of award to TPVI in 2014 after the subsidiary posted the highest bid of P1.088 billion for Naga Power Plant Complex after two failed bidding.
The Supreme Court in a Sept. 28, 2015 decision upheld the validity of PSALM’s public bidding, and reiterated the decision in an Oct. 5, 2016 resolution.
The Naga Power Plant Complex is composed of diesel and coal power plants with a combined capacity of 153.1 megawatts.
To recall in 2009, SPC Power Corp. acquired, through a negotiated bid, the land-based gas turbine power plant in Colon, Naga City.
In the same year, it entered into a land lease agreement with PSALM, which included SPC’s right to top the price of a winning bidder for the sale of any property within the leased premises.
Issues came up after PSALM bid out the Naga plant in the leased premises. After two failed bids, PSALM issued a notice of award to TPVI for submitting the highest bid as against SPC’s P859 million.
However, SPC wrote PSALM of its plan to exercise its right to top the winning bid, saying the earlier land lease agreement would be for 25 years from closing date.
PSALM then awarded the contract to SPC, despite TPVI’s objections that SPC did not validly exercise its right to top because of its qualified offer.
A separate case filing followed, with the Supreme Court canceling the award to SPC on Sept. 28, 2015. The court ruled that SPC’s right to top is void for lack of interest or right to the object over which that right is to be exercised.
On April 6, 2016, the Supreme Court ordered that an entry of judgment be made in the case. It also responded on Oct. 10, 2016 to several motions with the issuance of a notice of judgment. It clarified through a resolution that the nullification of SPC’s right to top did not invalidate the entire bidding process. The high court also ordered the reinstatement of the notice of award dated April 30, 2014 in favor of TPVI. — Victor V. Saulon
