PSALM to rebid Masinloc power plant

07 Aug 2006

The Power Sector Assets and Liabilities Management Corporation (PSALM) will offer anew the 600-megawatt Masinloc coal-fired power plant to interested investors in a public auction.

PSALM has yet to fix the schedule of the public auction, said PSALM President Ms. Nieves L. Osorio. As stipulated in the Electric Power Industry Reform Act, most of the power plants owned by the National Power Corporation must be sold to the private sector.

“We have to make sure that favorable conditions are in place as we must have enough bidders to ensure that government will get competitive offers,” pointed out Ms. Osorio. “Considering the recent experience, investors need to be assured of a market for Masinloc’s power output. Aside from power sales contracts, the wholesale electricity spot market (WESM), which is now operating, provides a market-driven venue through which generators can sell the electricity they produce. WESM should have established a favorable track record by the time we rebid Masinloc.”

Under the asset purchase agreement (APA) between YNN Pacific Consortium Inc., the winning bidder for the Masinloc power facility, and PSALM, the effective date of termination of the contract comes 30 days after the written notice was served to YNN by PSALM.

“The 30-day period ended on August 6. This finally closes the whole transaction between PSALM and YNN,” said Ms. Osorio.

YNN submitted a high bid of $561.7 million last December 2004. The only other bidder then, First Gen Corporation, submitted $274.8 million, which was 30% lower than the government’s reserve price for the power plant of $388 million.

PSALM is currently bidding out the 25-year concession of the National Transmission Corporation and the 112-megawatt hydroelectric power plant package composed of the Pantabangan and Masiway facilities.

Strategic Communications and Partnership Division
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