PSALM extends TransCo prequalification deadline anew

15 Sep 2006

Investors interested in bidding for the 25-year concession contract of the National Transmission Corporation (TransCo) will have until Thursday, 28 September, to submit their prequalification requirements.

The Power Sector Assets and Liabilities Management Corporation (PSALM) decided to extend anew the deadline by another two weeks to again accommodate the requests of the participating groups for more time to prepare the prequalification documents needed for their participation in the auction of the transmission facility. The deadline for submission was supposed to be on Friday, September 15, the first extension given by PSALM in response to the investors' requests. The original deadline was set on 28 August.

PSALM, which received at least five requests for another extension, considered the best interest not only of the government but also of the participating parties in stretching the deadline for submission of the prequalification requirements.

"We want to ensure that two or more parties will participate in the bidding," said PSALM President and Chief Executive Officer Nieves L. Osorio. "It will be most unfortunate if only one party will show up for the prequalification process because the bidding will automatically be declared a failure."

"We believe that all parties concerned will benefit if we make the terms of reference a lot clearer," Ms Osorio said. "We would like to assure all prospective participants in the Transco bidding that PSALM will maintain transparency in all stages of the transaction."

Although it is prepared to submit most of the prequalification documents, one of the interested bidders disclosed that its principal and prospective partners would need a little more time beyond the prequalification deadline given the need to address several requirements involving the technical and financial aspects of its bid.

While the bidder expressed support for the Philippine government's desire to fast-track the privatization of TransCo, it pointed out that it would be more beneficial to have the most number of interested parties participating in the bidding. This would encourage more competition, resulting in the best possible terms for the privatization of the transmission facility, the bidder said.

Another prospective bidder stated that the extension would give it more time to complete the arrangements necessary to submit a prequalification proposal in accordance with PSALM's bidding procedures.

A bidder from Asia sought the extension to accommodate the request of a group that wants to join the consortium being formed to bid for the TransCo concession. In its letter to PSALM, the bidder said its board of directors would have to discuss the request of the group seeking to join the consortium.

Since it is still in the process of complying with the documentary requirements, another bidder sought the extension to give time to all parties involved in its consortium to review and input their comments in the transaction documents.

The financing group representing a prospective bidder from Asia sought the extension because the organizational documents of one of the members of the bidding consortium were not yet available. The documents, which are part of the prequalification requirements, will originate from the US and London, which means that it will be physically impossible to submit them on the 15 September deadline, the financing group said.

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.

Strategic Communications and Partnership Division
Tel. No. (632) 9029067