PSALM to pursue open negotiations
Saturday, June 17, 2006
By MYRNA M. VELASCO
Even in the face of legal scuffle that may be thrown its way, the Power Sector Assets and Liabilities Management Corporation (PSALM) is bent on pursuing open negotiations in its next attempt to divest the 600-megawatt Calaca coal-fired power facility.
Questions are still raised if the first round of bidding, wherein it cancelled the process, could likewise be rendered a failure of bidding. This scenario thrives as an inducement for a court battle to any party who will eventually oppose the sale.
PSALM president Nieves L. Osorio is expecting that two more investor groups are to turn up during the open negotiations, targeted September this year.
"PSALM is now considering whether to conduct a sealed bidding or an open negotiations similar to what was done last April 27," announced PSALM vice president and asset management and electricity trading group Froilan A. Tampinco said.
This time, the company will also be taking some twist in its bidding process that it now wants to reveal to interested parties the reserve price prior to submission of financial bids.
"PSALM will announce the reserve price prior to the bidding date," the company official added, the rationale for this would be to ensure that interested parties would not anymore fall short in meeting the prescribed reserve price.
Instead of submitting sealed bids during the next bidding, he added that the participants may be allowed to submit price offers for a pre-determined number of rounds.
The price offers will be made known to all participating parties; wherein each bidder will be allowed to revise its price offer in the succeeding rounds. "The party that submits the highest price offer while meeting the reserve price will be awarded the generating asset," Tampinco noted.
In line with this plan, PSALM bared that it is reevaluating Calaca’s reserve price currently set at 8 million; but Tampinco did not specify what parameters they are looking at to drive the reserve price down or up.
"We wanted to allow interested parties, under terms to be included in the bidding procedures, a period within which to discuss with PSALM the factors or criteria in arriving at a reserve price," he stressed.
PSALM maintained that the second round of bidding last April 27 was declared a failure "after one of the bidders (DMCI Holdings, Inc.) showed up at the wrong venue."
After that, PSALM attempted open negotiations between DMCI and First Gen Luzon Power Corporation; and the latter submitting higher was given three chances to set a price offer; but it was still lower than the reserve price.
posted by philpower @ 6:56 AM,
