by Myrna Velasco – August 11, 2016
from Manila Bulletin
Rebid option is the scheme being studied cautiously by Power Sector Assets and Liabilities Management Corporation (PSALM) for legally contested 153.1-Naga thermal power plant in Cebu.
PSALM officer-in-charge Lourdes S. Alzona has qualified though that they can only move forward with next plans when the Supreme Court decides with finality on the case questioning the “right-to-top” terms in the asset’s bidding.
She disclosed that the Aboitiz Group sought meeting with PSALM as to the fate of the
Naga facility’s privatization – and also sounded off that the asset should have been awarded to their subsidiary – Therma Power Visayas, Inc. (TPVI), the party that originally won the bidding minus the right-to-top option of SPC Power.
“We had a meeting with the Aboitiz Group. We told them that we cannot award the asset to them unless there is a court ruling explicitly stating that the Naga plant shall be awarded to TPVI,” Alzona said.
That PSALM pronouncement, she said, prompted the Aboitiz Group to file a manifestation with the high court seeking for a turnover of the asset to them.
“We really have to make sure that there is a definitive ruling on the asset’s award. Otherwise, we will be sanctioned by COA (Commission on Audit),” Alzona said.
She added if there is no direct reference of an award to the Aboitiz Group once the high tribunal decides with finality, then PSALM’s recourse will be to hold another round of sale auction for the Naga facility.
It must be recalled that the Supreme Court rendered a ruling last year nullifying the award of the privatized power plant to SPC Power Corporation.
The high court’s ruling was anchored on a premise that the “right-to-top provision” in the bidding’s terms of reference (TOR) had been deemed invalid.
PSALM appealed the SC verdict, stressing that the right-to-top was a condition made known to all parties prior to the asset’s bidding.
A subsidiary firm of the Aboitiz group won the bidding, but SPC exercised its right-to-top, hence, it was able to corner the asset at R1.14 billion.
The Naga plant was formally turned over by PSALM to its new owner in September, 2014. The court’s eventual verdict though had tangled the previous privatization process that PSALM had undertaken.