14 Mar 2008
The Power Sector Assets and Liabilities Management Corporation (PSALM) strongly denied it has threatened to forfeit the performance bond of Masinloc Power Partners Co. Ltd. (Masinloc Power) for the sale of the Masinloc Thermal Power Plant.
"PSALM and Masinloc Power are acting as a team to accelerate the closing of the transaction and, to this end, PSALM has maintained open communications with Masinloc Power. PSALM has in no case threatened Masinloc Power with forfeiture of its performance bond," said Atty. Helena C. Tolentino, PSALM vice president for Contracts Management and Corporate Services, in reaction to recent news reports on the alleged PSALM threat.
Masinloc Power, a consortium led by Singapore-based AES Transpower Pte. Ltd. (AES), won the bidding for the 600-megawatt Masinloc Coal-Fired Thermal Power Plant last 26 July 2007 with a bid of USD930 million.
With the closing of the transaction, Masinloc Power is obligated to pay an upfront payment of at least US$372 million, or 40% of its bid. "But Masinloc Power has stressed it will pay 100% of its bid offer on closing date," Atty. Tolentino said.
"We are aware of Masinloc Power's efforts to meet its obligation and we appreciate the support of International Finance Corporation and other institutions that are helping Masinloc Power in this regard," she added.
Masinloc Power's payment will go to the liquidation of the National Power Corporation's debts, as specified under the Electric Power Industry Reform Act (EPIRA), to help lower the government's debt burden.
The Asset Purchase Agreement for the Masinloc power plant provides that the transaction should close no later than 270 days after the effective date of 28 August 2007, or until 24 May 2008. "PSALM is ready with its deliverables, including a coal sale agreement and a program for the rehabilitation of the power plant, and we hope to close the sale with Masinloc Power as soon as possible so that the benefits from the privatization of the Masinloc plant will be immediately felt by the Filipino people," Atty. Tolentino explained.
Strategic Communications and Partnership Division