Supply contracts eyed as part of sale of Magat hydro plant
Saturday, September 23, 2006
By MYRNA M. VELASCO
To make it more attractive to prospective buyers, the Power Sector Assets and Liabilities Management Corporation (PSALM) is working on supply contracts that may account for 10 to 15 percent of the installed capacity of the 360 megawatts Magat hydro power facility due for auction this November.
Company officials indicated that they are targeting a success rate that would duplicate the recent successful bidding of the 112-megawatt Pantabangan and Masiway hydro power facilities.
That particular asset sale was made with about 60 MW of supply contracts attached to the package; which is more than half of the facilities’ aggregate capacity.
PSALM vice president for asset management and electricity trading group Froilan A. Tampinco noted that there are about 13 parties interested to join Magat’s privatization; and "we are targeting to put it in the auction block by the second half of November."
He hinted that the parties which previously set interest in the Pantabangan-Masiway assets are also included in the roster for Magat, including AES Energy, CalEnergy, First Gen, Korea Electric Power Corporation and SN Power/Aboitiz group.
PSALM said it is scheduled to start issuing preliminary transaction documents next week; with prebid conference slated by September 27.
At this stage, Tampinco is certain that they are likely to resolve most of the issues raised by prospective buyers; including concerns on operation and maintenance (O&M) of non-power components which shall be the subject of agreement with the National Irrigation Administration.
"We are now zeroing in on some land issues and expect to resolve these soon," the PSALM official has stressed.
The Magat hydroelectric plant which is sited in Isabela counts over 20 years of operation, starting in 1983.
The facility was built at a cost of $ 83.7 million comprising of foreign and locally-sourced funding.
It was gathered that the sale of Magat might be the last for PSALM this year; as they have yet to work on contract needs of the other facilities.
PSALM already set forth indications that if the assets sale would be lacking in supply contracts, the privatization of National Power Corporation (NPC) might be delayed up to 2009.
This means that policy reforms tied to the privatization process, such as open access, may also suffer setbacks in implementation.
posted by philpower @ 12:21 PM,
