by Myrna Velasco, 19 July 2015
from Manila Bulletin
After defrauded privatization snagged some processes in 2014, the Power Sector Assets and Liabilities Management Corporation (PSALM) has indicated that it is now exploring alternative schemes of divestment for the idled 850-megawatt Sucat thermal power plant (STPP).
PSALM said it already secured clearance from the Department of Energy (DOE) through a letter to place the asset back on the auction block within this year’s second half.
“PSALM is currently updating the sale structure of the STPP for presentation to the Board,” the asset-seller firm said.
It noted though that there had been no clear instruction from the department whether the asset could be disposed as “scrap” or if there would still be a requirement for its conversion to another fuel use. This is after the botched sale of the Sucat plant with Genetron International Marketing (GIM) was already shelved with finality.
PSALM stressed that it “terminated the APA (Asset Purchase Agreement) due to the breach of the standby letter of credit issued by GIM which did not follow specific terms and conditions under the bidding procedures.”
On its forward pathway into selling the Sucat facility, PSALM has emphasized that it sought direction from the DOE, but the latter just instructed that “the land where the Sucat plant is situated should still be for energy use.”
When PSALM queried further as to the ‘specifics of the energy department’s directive’ – whether it can already divest the asset as scrap or not – its parent agency just reiterated its response that the site of the plant shall still be allocated for energy use.
The company emphasized that based on its internal study, proposals of pursuing the rehabilitation of the facility will be “more expensive than putting up a new power plant.”
It has always been the intent of the energy department to align the Sucat plant’s conversion into a gas-fed electricity generating facility so it could serve as anchor load for the planned high pressure gas pipeline traversing the routes from Batangas to Manila.