PSALM suspends Malaya plant sale

By Myrna M. Velasco – May 19, 2018, 10:00 PM
from Manila Bulletin

The board of Power Sector Assets and Liabilities Management Corporation (PSALM) in its last meeting has decided to temporarily suspend “privatization plans” for the 650-megawatt Malaya thermal power plant.

Essentially, according to the members of the Board, they “terminated bidding process” for the plant – and had opted to instead tap a third party advisor that would be able to recommend “appropriate divestment mode” for the facility.

Nevertheless, Department of Energy (DOE) Undersecretary Felix William B. Fuentebella indicated that they will seek reconsideration of the PSALM Board decision, with him noting that “there’s a DOE letter that was sent just after the Board meeting stating that there are no problems anymore when it comes to the plant’s privatization.”

He said they intend to sit down with Finance Undersecretary Bayani H. Agabin “so the concerns on Malaya’s privatization could be resolved.”

Manifestly, the energy department is batting for continuous divestment for the asset, in which it also recommended to be converted into a gas-fired power facility.

It was similarly gathered from the board that formal letters of the “bidding termination” will be sent to Malaya plant’s prospective bidders – once a final decision is taken.

But as of press time, it was tipped off by energy official-sources that PSALM Board has already agreed to calendar Malaya’s privatization anew as part of its agenda in the next meeting.

In a related development, the auction for Malaya’s one-year operation and maintenance (O&M) contract has been moved to May 30 this year, so PSALM “could respond more comprehensively” to the queries of pre-qualified bidders.

The company previously stated that it is eyeing eight firms joining the O&M bidding exercise – which was first calendared May 15 this year.

The O&M deal is an interim arrangement that PSALM has been resorting to on continued operations of the Malaya plant – it being a transition phase also to the power facility’s eventual divestment.

The Malaya plant is currently being depended upon as must-run unit (MRU) in the system – in that sense, it is the generating facility being called upon for dispatch when supply runs too tight in the Luzon grid.