By Myrna M. Velasco – October 20, 2018, 10:00 PM
from Manila Bulletin
At least six companies have signified initial interest to bid for the 650-megawatt (MW) Malaya thermal power plant that has been lined up by asset seller Power Sector Assets and Liabilities Management Corporation (PSALM) for auction before the end of this year.
The state-run company has not identified the interested bidders at this point – but it is raising hopes that they will advance to the actual submission of offers as slated on December 14.
PSALM held its pre-bid conference on October 17 on the privatization of the thermal power facility, primarily to gauge investors’ take on their preferred package on the asset’s divestment.
“As of the date of the conference, six entities have signified to PSALM their intention to bid,” the government-run firm said.
With the company finally advancing Malaya plant’s sale to the private sector, it asserted that “the transition to private ownership will be a win-win venture for both the government and the winning bidder.”
The state-run company has somehow relaxed the asset’s privatization terms – that its shift to gas fuel is no longer a precondition; as well as the initial requirement for it to be aligned as must-run unit (MRU) for at least three years.
As MRU facility, the Malaya plant had been set as a stand-by generating asset that the system operator can call for dispatch instantly when the power grid suffers from supply deficiency.
That has been a function served by the Malaya plant for several years – especially at the time when Luzon grid had to brace through supply shortages – chiefly in the years from 2014 to 2016.
With capacity additions in the last two years, the grid had relatively been on a better position already, hence, the government opted to finally decide on Malaya plant’s divestment.
When it was lined up in the privatization block last year, four companies were being counted upon as serious bidders – but when the sale package changed on the proposal of the Department of Energy (DOE) then, most of them backtracked on their interest to join the bidding.