PSALM to procure Casecnan hydro plant’s operation and maintenance contract

02 Sep 2021

The Power Sector Assets and Liabilities Management Corporation (PSALM) will immediately procure an Operation and Maintenance Service Contract (OMSC) for the Casecnan Multi-Purpose Project (CMPP). This is to ensure the continuing operations of the CMPP’s irrigation component and the 150-megawatt (MW) Hydroelectric Power Plant component after the ownership of the CMPP is turned over to the government in December 2021.

NIA, just this week, finally agreed to allow PSALM to be the one to procure the OMSC. With the concurrence of the Department of Finance and the Department of Energy, PSALM will undertake the procurement of the OMSC pursuant to Republic Act No. 9184 or the “Government Procurement Reform Act.” Thereafter, PSALM will work on the terms of the privatization of the CMPP through public bidding.

The CMPP is covered by a Build-Operate-Transfer (BOT) contract between the National Irrigation Administration (NIA) and the Independent Power Producer, CE Casecnan Water and Energy Company, Inc. (CE Casecnan). It started commercial operations in 2002 and will expire on 11 December 2021. There is a Power Purchase Agreement (PPA) between NIA and PSALM, whereby NIA will transfer 60% of the ownership of the CMPP to PSALM by the end of the PPA.

“PSALM intends to begin the procurement of the OMSC by the second week of September 2021 through a competitive public bidding process. The contract will be effective for one year until PSALM commences and completes the plant’s privatization by the end of 2022. All proceeds from the successful privatization of the Casecnan Hydroelectric Power Plant will be divided by NIA and PSALM in accordance with their ownership interest in CMPP,” PSALM President and CEO Irene Besido-Garcia said.

The CMPP provides 19 million kilowatt-hour of hydroelectric power per month to supplement the energy supply in the Luzon grid. It also ensures continuous irrigation services to about 139,200 hectares of farmland in Nueva Ecija, Pampanga, Bulacan and Tarlac, amounting to 58.333 million cubic meters per month in accordance with the water protocol prescribed by the NIA.

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