Lopez, DMCI eye Calaca
Friday, April 28, 2006
By Alena Mae S. Flores
First Gen Corp., the power generation arm of the Lopez Group, and construction giant DMCI, owned by the Consunji family, yesterday submitted bids to acquire the 600-megawatt Calaca coal power plant in Batangas province.
The Power Sector Assets and Liabilities Management Corp., which oversees the privatization of power assets in the Philippines, however, declared the auction a failure after one of two bidders went to the wrong venue and failed to meet the deadline, a source said.
PSALM said it would instead proceed with open negotiations to pick the winning bid.
“Although two bidders gave proposals, one brought the documents to the wrong venue,” the source said. “We will issue updates on the Calaca bidding describing the procedures for the open negotiations that will proceed tonight.”
The Calaca plant was among 10 plants owned by state-run National Power Corp. that the government planned to auction this year in what is viewed as a litmus test of investor confidence in the country.
The privatization is part of efforts to cut the government’s debt and lure investors to develop the energy sector.
“The bidding was declared a failure,” a government source told Reuters
Under the bidding rules, at least two firms must submit proposals.
“PSALM is now considering its options and is now discussing this with the bidders,” the source said.
The power plant is the first major asset put on sale since President Gloria Macapagal Arroyo ended a week of emergency rule on March 3 after the military uncovered an alleged coup plot.
First Gen submitted its bid at the PNOC-Exploration Corp. office in Taguig where the bidding was supposed to take place. DMCI, meanwhile, forwarded its bid to the PSALM office in SGV Building, Ayala Avenue, Makati.
First Gen participated in the first Calaca bidding last year.
PSALM issued its invitation to bid for Calaca in August 2005, with four investor groups submitting letters of interest to participate in the public bidding.
PSALM announced early this month that it had attached a supply contract to the Calaca power plant to boost investor interest.
In July last year, the bidding of Calaca, the second largest power facility in the list of assets to be privatized by PSALM after the Masinloc power plant, was declared a failure when only one bidder showed up.
Two other bidders backed out at the last minute due to the absence of a transition supply contract that would have given the winning bidder a captured market for the power of the Calaca plant.
“While we are selling Calaca mainly as a merchant plant, PSALM has attached to it a supply contract equivalent to 83 megawatts. The new owner will only have to look for additional markets and negotiate for its own bilateral contracts with either distributors or big electricity consumers,” an official said.
posted by philpower @ 6:14 PM,
