Aug 212013

MANILA, Philippines – The Power Sector Assets and Liabilities Management Corp. (PSALM), the agency tasked to oversee the privatization of the government’s power assets, will review the terms for the sale of the 153.1-megawatt Naga Plant in Cebu  after last month’s failed bidding.

An official said the government would have to “review the price” as it may be too high to attract investors.

“PSALM will assess if the price is attractive enough,” the official said, adding that the agency would again try to resell the plant this year.

“PSALM will try to do another round of bidding this year,” said the source who declined to be identified due to the sensitivity of the issue.

In July, the PSALM Bids and Awards Committee (PBAC) declared a failure of bidding for the Naga plant after only one bidder submitted documents deemed compliant by the committee.

“Pursuant to the bidding procedures, should only bidder submit documentary deliverables that is deemed compliant by the PBAC, there shall be a failure of bidding,” PSALM said in a notice issued last month.

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Under the original terms, the winning bidder will be required to issue a P93.86 million performance bond to PSALM.

Sources said the failure of bidding was not expected after four groups earlier expressed interest in bidding for the plant.

DMCI Holdings Inc., the Aboitiz Group, D.M. Wenceslao and SPC Power Corp. joined the pre-bid conference for the Naga Plant privatization.

The Naga complex in Cebu is composed of three thermal power plants that use a combination of diesel, bunker C oil and coal as fuel.

As of December 2011, PSALM’s privatization proceeds from the sale of generating assets, decommission plants, transmission assets and appointment of independent power producer administrators have reached $10.210 billion.

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