STATE-LED Power Sector Assets and Liabilities Management Corp. (PSALM) has received four proposals for the 650-megawatt (MW) Malaya thermal power plant in Rizal that serves as the government’s back up facility to ensure power supply stability.
“Out of the 11 [interested bidders], we have four who submitted,” PSALM President and Chief Executive Irene Joy B. Garcia told reporters about the agency’s latest effort to privatize the power plant.
She identified the companies are Ayala-led AC Energy, Inc., DM Wenceslao and Associates, Inc., Consunji-led DMCI Power Corp., and Lopez family’s FGEN Reliable Energy Holdings, Inc.
Ms. Garcia said 11 companies had expressed interest in the power plant but come bidding deadline in late November, only four came forward with an offer.
“They purchased the bidding documents, they indicated intention to bid, pero come the deadline last week for the presentation of the submission of all the documentary requisites aba eh apat lang ang nag-submit (only four submitted,” she said.
The plant in Pililla, Rizal was designated in 2014 as a “must-run” unit by the Department of Energy. A must-run plant is compelled to run and provide the needed power supply as deemed necessary to ensure reliability of power supply in the Luzon grid, especially in times of supply shortfall, system security and voltage support.
The bidding is the latest attempt by PSALM to sell the plant, for which previous bidding exercises resulted in failure. This time, the agency is hiring a third-party “valuator,” the selection of which will also be done through bidding.
Ms. Garcia said she had to go back to the PSALM board to seek a two-month extension for the bidding of the third-party valuator otherwise she had expected none would be interested.
“There are two things going on with Malaya. The first one is the bidding for the consultancy services so that we can get a third-party valuator that would become the basis for our board of directors for setting the floor price,” she said.
Ms. Garcia declined to estimate the value of the power plant, saying the third-party valuator is the one tasked to set the valuation.
“The second thing that’s going on with Malaya is mismong bidding na (the bidding itself) for privatization. You will remember that we were setting the schedule for the consultancy earlier than the other one,” she said.
Ms. Garcia said she expects the bidding for the plant to be completed early next year.
Earlier this year, PSALM approved a budget of P264 million for a one-year contract to operate and maintain the thermal power plant.
The Malaya plant is being managed by PSALM through an operation and maintenance service contract. It was rehabilitated in 1995 by Korea Electric Power Corp. under a 15-year rehabilitate-operate-manage-maintain agreement. — Victor V. Saulon