Cusi opts for rebid if Malaya plant divestment fails

By Myrna M. Velasco – March 3, 2017, 10:00 PM

from Manila Bulletin

Asset-seller Power Sector Assets and Liabilities Management Corporation (PSALM) is anticipating a “failed bid outcome” on the scheduled privatization of the 650-megawatt Malaya thermal power facility, but this is a fate already accepted by Energy Secretary Alfonso G. Cusi and he is instead opting for a rebid process.

It was gathered that some of the interested groups in the Malaya asset already have second thoughts advancing to the final bid submission because the energy chief’s proposal to have the plant converted into a liquefied natural gas (LNG) power facility may necessitate material changes in the auction’s terms of reference.

No hints for now which parties would be withdrawing on their intended participation in the asset’s bidding, which is slated March 8 this year.

When the Malaya plant was first planned for divestment, it was still to run as oil-fired generating asset, without the condition on fuel use conversion.

Cusi told reporters that it would even be better to rebid the asset with condition on the LNG conversion – that is if the current batch of interested groups would not be keen on the fuel shift arrangement for the facility.

“From diesel which is inefficient and expensive power source, what we just want is to have a cleaner source of power that could run baseload – still at 600MW, and equipped with a reliable technology,” he said.

The plant’s technology shift is already incorporated in the draft contract that PSALM will have with the winning bidder.

Cusi emphasized that PSALM has to present a study on the plant’s propounded conversion before the company could move to any next round of bidding process – just in case the March 8 auction would be a flop.

The energy chief added that the delivery of LNG fuel to the plant – either via a pipeline or on the feasibility of break-bulk gas handling facility, shall be part of the items that the asset-seller firm must study and evaluate.