17 Aug 2011
The Power Sector Assets and Liabilities Management (PSALM) Corporation conducted a Pre-bid Conference last Friday, 12 August 2011, as it pursues its mandate to appoint an Independent Power Producer Administrator (IPPA) that will manage the contracted capacity of the Naga Power Plant Complex. Various investor groups warmly welcomed the resumption of the government's privatization program pursuant to the Electric Power Industry Reform Act of 2001.
According to PSALM President and CEO Emmanuel R. Ledesma Jr., eight prospective bidders are eyeing the Visayas-based power facility. These investor groups are a mix of new and old participants in the power industry, some of which have formerly participated and have won in previous bidding exercises.
Ledesma stressed that a number of private entities that intend to enter or expand their investments in the power industry are interested in this power asset. The Naga IPPA is actually a low-cost, low-risk technique of entering the Visayas electricity market.
At the Pre-bid Conference held at the PSALM offices in Makati City, the Bidding Procedures for the Naga IPPA auction were presented to and discussed in detail with the interested bidders.
PSALM also sought comments on the proposed legal and commercial structures of the transaction, wherein the Corporation will employ a back-to-back approach for the Naga IPPA and the winning bidder will enter into two agreements with the government. The Administration Agreement will cover the responsibilities of the winning bidder as the IPPA of the contracted Naga capacity throughout the duration of the Rehabilitate-Operate-Maintain-and-Manage Agreement (ROMMA)/Energy Conversion Agreement (ECA), while the Property Agreement will govern the ownership by the winning bidder of the Naga Power Plant Complex at the expiration of the ROMMA/ECA.
The deadline for the submission of bids for the Naga IPPA is at 12 noon on 10 October 2011, after which the PSALM Privatization Bids and Awards Committee will evaluate the submitted proposals. Currently, the prospective bidders are conducting their due diligence on the power asset.
"Transparency and accountability will continuously be ensured by PSALM throughout the bidding process," Ledesma said.
The Naga Power Plant Complex consists of the 106.8-megawatt (MW) Naga Coal Thermal Power Plants 1 and 2 and the 39-MW Naga Diesel Power Plant located in Naga, Cebu. The plants are under a ROMMA/ECA with KEPCO Salcon Philippines Corporation which will expire in March 2012.
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