PSALM to privatize 650-megawatt Malaya plant this year

By Myrna M. Velasco – August 5, 2018, 10:00 PM
from Manila Bulletin

After two years of flip-flopping, go-signal was finally given to the Power Sector Assets and Liabilities Management Corporation (PSALM) to resume privatization process for the 650-megawatt Malaya thermal power facility – and it will come without the previously planned technology shift for the asset.

PSALM logo

“Before the end of 2018, the privatization of the Malaya thermal power plant shall commence,” asset-seller firm PSALM has noted in a statement to the media.

As gathered, the approval from its Board no longer requires the earlier proposed fuel shift of the plant from oil to gas. “Basically, it will be back to the original privatization plan,” government sources said.

It must be recalled that the Department of Energy (DOE) sought for the deferment of the plant’s bidding in 2016 because it had been opting then for Malaya plant’s conversion into a gas-fired power facility.

But after two years, it was noted that the final proposal will be to divest the asset and PSALM will just leave to the discretion of the winning bidder if it wants to re-configure the facility to a gas plant or not.

Back in 2016, at least four companies have prequalified to bid for the Malaya thermal asset – and it remains to be seen if it will entice the same level of interest this time or investors’ appetite may have already dwindled.

Aside from the Malaya plant, PSALM indicated that it will also advance this year on the sale of other assets – including real estate properties of the National Power Corporation.
This month, it emphasized that it will commence divestment process for underlying lands that had been the site of the Manila thermal power plant.

“PSALM is entirely committed to fulfilling its mandate of privatizing its remaining assets,” the state-run firm stressed, adding that recent accomplishments on this sphere include the sale of Power Barge 104 and the decommissioned Sucat thermal facility.

At the same time, the company was able to divest more than 900 hectares of real estate assets – that essentially shored up its privatization proceeds.

“It is not true that PSALM is not privatizing its assets. PSALM has already generated privatization proceeds from assets amounting to P918.50 billion,” the company said.

PSALM President Irene Joy B. Garcia similarly conveyed that the company “adheres to full transparency,” and that its records show that the privatization proceeds “are still utilized to pay its financial obligations.”