PSALM sets new prequalification deadline for TransCo bidders

01 Sep 2006

Friday, 15 September will be the new deadline for investors interested in bidding for the 25-year concession contract of the National Transmission Corporation (TransCo) to submit their prequalification requirements.

Ms. Nieves L. Osorio, president and chief executive officer of the Power Sector Assets and Liabilities Management Corporation (PSALM), announced the new deadline in response to requests of the prospective bidders for more time to prepare the prequalification documents required for their participation in the auction of the transmission facility.

The bidders specifically asked PSALM for an extension of at least two weeks from the original 28 August deadline to enable them to complete the prequalification requirements, including conducting their due diligence and forming their respective consortiums. The bidders hope that PSALM will respond positively to their request, saying they are all keen on this investment opportunity. Their hopes have been answered.

"The extension will give us some time to compile additional documents and translate to English the submissions of our technical partner," wrote the law firm representing a Filipino group interested in bidding for the TransCo concession.

Most of the bidders are still working on their initial consortium agreements.

In its letter, another interested group described the preparation of the prequalification requirements as an "extensive exercise." "We believe that the extension we are seeking will assist us greatly and enable us to participate in the bidding process [for the TransCo facility]," the bidder wrote PSALM.

Another law firm also sought a two-week extension, saying that the prequalification proposal of its client is "still being finalized and the external approvals from the consortium members are still being processed."

An investment company, a financial services firm and a large private equity company with highly diversified interests worldwide have likewise sought an extension of the August prequalification deadline.

PSALM earlier considered the bidders' request for sufficient time to complete their due diligence and form their respective consortiums by moving the bidding date for the 25-year concession contract of TransCo to 07 November 2006 from the original schedule of 27 September 2006.

"Considering the complexity of the transaction, the stringent requirements, and the huge amounts involved, we want to make sure that all the bases are covered," explained Ms. Osorio. "We want to ensure that there will be a sufficient number of participants in the auction so the government can get competitive bids. On our part, this will give us more time to conduct our own due diligence on the prospective bidders."

The extension will also allow PSALM more time to discuss and clarify the terms of reference for the TransCo concession. Several bidders have submitted their comments that PSALM is now evaluating. The results of the discussion will be presented in the forthcoming pre-bid conference.

"We also have to consider and extensively discuss the various comments we have received after we released the draft transaction documents," said Ms. Osorio. "PSALM wanted to ensure that all the concerns and issues raised by the prospective bidders were extensively tackled before proceeding with the bidding proper."

"We want to accelerate the sale of the country's power assets," she stressed. "The adjustment will not cause a significant delay. We simply want to make sure that all the requirements are in place, the rules are clear to all participants, and a thorough prequalification process is implemented."

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