By Jordeene B. Lagare – August 23, 2019
from The Manila Times
THE Power Sector Assets and Liabilities Management Corp. (Psalm) has rescheduled the deadline to submit bids for the sale of the 650-megawatt (MW) Malaya Thermal Power Plant and its underlying land.
In the latest supplemental bid bulletin posted on its website, the state-run corporation said all interested parties have until September 18 at 12 noon to submit proposals for the power plant asset.
Psalm said it extended the bid submission deadline “to accommodate the mandatory review of Office of the Government Corporate Counsel (OGCC) on all of Psalm’s privatization documents, including the asset purchase agreement pursuant to Section 4.3 of the Governance Commission for Government Owned or Controlled Corporations (GCG) Memorandum Circular No. 2018-02.”
It also said the privatization of the Malaya thermal facility will fall under acquisitions, as per Republic Act 10667 or the Philippine Competition Act, its implementing rules and regulations, and relevant issuances of the Philippine Competition Commission (PCC).
Psalm and the winning bidder are mandated to observe and abide by the commission’s guidelines, particularly on the Compulsory Notification or Non-Coverage Requirement, whichever is applicable.
In March last year, the PCC raised the thresholds for required notification for mergers and acquisitions (M&A) to P2 billion for the size of transaction and P5 billion for the size of person to ensure “that the thresholds maintain their real value over time and relative to the size of the economy.”
This is not the first time that Psalm rescheduled the deadline for the Malaya thermal plant. Previously, the state-led corporation adjusted the bid submission deadline to commission an independent assessor before proceeding with the sale of the Malaya plant.
Psalm President and Chief Executive Officer Irene Joy Garcia had said inputs from that third-party consultant would serve as Psalm’s basis for setting the floor price for the thermal plant.
It has then awarded the P8.5-million contract to PricewaterhouseCoopers (PwC) Philippines to assist Psalm in the privatization of the Malaya thermal facility and its underlying property.
PwC Philippines, as the principal consultant, is responsible for crafting financial models and analyses to optimize value for the land and structures of the Malaya plant, while sub-consultant Asian Appraisal Company, Inc. shall appraise the land where the thermal facility stands.
Psalm is selling the Malaya plant comprised of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with conventional boiler.
In 1995, it was rehabilitated by Korea Electric Power Corp. under a 15-year rehabilitate-operate-manage-maintain agreement.
Then, in 2014, the Department of Energy (DoE) designated the facility as a must-run unit. It is compelled to run and provide electricity when necessary to ensure the reliability of power supply in the Luzon grid.
Korean firm Soosan ENS Co., Ltd. bagged the one-year service contract for the operation and maintenance of the thermal plant in January this year following its P205.7-million offer.