PSALM procuring P5.4B worth of fuel for power plants

by Myrna Velasco, 12 March 2015
from Manila Bulletin

Having assumed fuel risk for the power plants under its charge, state-run Power Sector Assets and Liabilities Management Corporation (PSALM) has issued this week new tender notice for its next batch of fuel procurement amounting to P5.44 billion.

The company, in an advisory to the media, has noted that it released the invitation to bid (ITB) to prospective fuel suppliers this Tuesday (March 10).

Pre-bid conference is slated March 17; while the deadline on submission of offers will be on April 7 this year.

The industrial fuel oil (IFO) purchase will primarily be allocated to its Malaya power plant as well as oil-fired facilities in Mindanao.

PSALM said it is scheduled to buy some 235 million liters of IFO for the three plants, noting that such would be extremely crucial especially with the anticipated tight supply conditions in both Luzon and Mindanao grids this summer.

The government-run power firm said it will be needing 35 million liters for the Malaya thermal power plant in Rizal province. This was earmarked a total budget of P854.368 million.

The Malaya plant has two generating units of more than 350-megawatt installed capacity each, but it is anticipated that only one unit will run during the supply-precarious period of March to July.

The two other power plants to be provided with fuel are the Southern Philippines Power Corporation (SPPC) facility in Zamboanga; and the Western Mindanao Power Corporation (WMPC) in Sarangani province.

The fuel procurement cost allocations for the two power plants have been pegged at P1.664 billion for SPPC for 72 million liters; and P2.92 billion for WMPC for 128 million liters.

PSALM president Emmanuel R. Ledesma Jr. said the programmed fuel purchase would be critically beneficial “with the incoming lean supply of electricity this summer.”

The company is also requiring prospective bidders “to have similar experience on the subject procurements within the last five (5) years from the date of the submission and receipt of bids.”

PSALM’s invitation-to-bid has stipulated in particular that “the allowable experience is a similar contract that is equivalent to at least 25-percent of the approved budget cost.”