Sale of Naga Complex begins

17 May 2013

The Power Sector Assets and Liabilities Management (PSALM) Corporation has commenced the sale of the 153.1-megawatt (MW) Naga Power Plant Complex (NPPC) with the publication of the invitation to bid (ITB) on Friday, 17 May 2013.

The ITB states that investor groups wishing to participate in the bid have until 5 p.m. of Monday, 27 May 2013, to submit a Letter of Interest.

Interested parties are likewise required to pay a non-refundable participation fee of PhP120,000.00 not later than 5 p.m. of 27 May 2013, and execute and submit a Confidentiality Agreement and Undertaking on or before 5 p.m. of Wednesday, 29 May 2013.

The due diligence for the Visayas-based power facilities is scheduled from Friday, 17 May 2013, to Monday, 22 July 2013, while the Pre-Bid Conference for prospective bidders will be held on Wednesday, 05 June 2013, 2 p.m. at the PSALM office in Makati City.

The bid submission deadline for the NPPC bidding is on Wednesday, 24 July 2013, at 12 noon.

"As we have previously disclosed, the NPPC will be sold as a merchant plant -which means that no power supply contract will be assigned to the sale - and will exclude the land underlying the plant complex," said PSALM President and Chief Executive Officer Emmanuel R. Ledesma, Jr.

The PSALM board gave the go-signal to begin the NPPC sale after the Department of Justice confirmed in an opinion dated 09 January 2013 that the "right-to-top" provision previously included in PSALM's bidding documents did not violate the rules on competitive bidding.

In 2011, PSALM deferred the bidding for the NPPC upon the request of the Joint Congressional Power Commission over an allegedly unfair and illegal condition known as a "right to top" the highest bid previously granted to SPC Power Corporation (SPC) in the Land Lease Agreement (LLA) executed among PSALM, National Power Corporation and SPC in 2009.

The LLA was executed pursuant to the Asset Purchase Agreement for the Naga Land-based Gas Turbine (LBGT) acquired by SPC through public bidding. In the agreement, SPC was granted the right to top the highest bid on the sale or lease of the properties within the vicinity of the LBGT to give the winning bidder the opportunity to expand, subject to the payment of a premium of 5% over the highest bid on the adjacent properties. The NPPC is located in the vicinity of the LBGT.

Located in Barangay Colon, Naga City, Cebu, the NPPC consists of two (2) thermal power plants and one (1) diesel power plant that use a combination of coal, bunker C oil, and diesel as fuel. These are the coal-fired Cebu Thermal Power Plants 1 and 2, with rated capacities of 52.5 MW and 56.8 MW, respectively; and the Cebu Diesel Power Plant 1 - consisting of six (6) 7.3-MW diesel-fed power units - which has a total rated capacity of 43.8 MW.

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