by Myrna Velasco, February 6, 2015
from Manila Bulletin
Moving forward from a favorable court decision, the award of the engineering, procurement and construction (EPC) contract for the two phased 600-megawatt Subic coal-fired power project is now targeted by the middle of this year.
This was indicated to the media by Manila Electric Company (Meralco) president Oscar S. Reyes, stressing that “we will hope that we can move on this (EPC closing) on or before the middle of this year.”
He stressed that from the time project sponsors will serve the notice to the proceed to the EPC contractor, it will take 42 months for construction to finish and to tangibly bring the plant to commercial operations.
The power generation subsidiary of Meralco – Meralco PowerGen — is the majority equity holder in the Subic project’s investment vehicle Redondo Peninsula Energy (RP Energy).
The court case has been a ‘major delaying factor to the power project’ which was initially depended upon by government to plug Luzon grid supply gap by 2015-2016.
Reyes averred “if it wasn’t due to the case, we would have brought in the plant by the latter part this year or early 2016 – which will continue to be a period of thinning reserves.”
The Meralco executive emphasized that preparations at the site “have been complete… substantial expenditures have been done.” RP Energy, it was noted, already spent P1.0 billion for site preparation works alone.
“I hope we will be able to proceed with the award of the EPC, finalize the financing again, close the financing, proceed with the EPC and proceed with the other parts of the project,” Reyes stressed.
Based on the project’s earlier crafted blueprint, the next phases in implementation would include sorting out Lease and Development Agreement (SDA) with the Subic Bay Metropolitan Authority.
Continued negotiations for a power supply agreement (PSA) on the plant’s power output will also be pursued – as well as eventual filing with the Energy Regulatory Commission (ERC) for its approval.