Polyethylene plant appeals to Mirant for supply of power to be able to operate
Tuesday, November 14, 2006
By JAMES A. LOYOLA
Metro Alliance Holdings and Equities Corporation served a demand letter on Mirant (Philippines) Energy Corporation for the power firm to stop alleged stonewalling of efforts to revive and re-operate the petrochemical plant in Mariveles, Bataan.
The plant, then owned by the Bataan Polyethylene Corporation, started producing petrochemical resins in 2000, but had to stop operations due to lack of raw materials coupled with rising productions costs.
Since last year, Metro Alliance and its foreign investor have been conducting works for the rehabilitation of the plant, and a crucial component in these efforts is the assurance of a constant supply of power.
On the other hand, the firm said Mirant, as the owner-operator of the substation located at the premises of the plant, is in the best position to provide the necessary power, precisely because it was originally intended to do so: It was constructed specifically, if not solely, for that purpose.
Metro Alliance said that, initially, the negotiations conducted between the new investors and Mirant were positive. One option looked into was the take-over by the government through the Napocor of the substation.
However, these talks fizzled out, with Metro Alliance unfortunately left hanging after having already expended a sizable sum in the preliminary recommissioning of the petrochemical plant.
According to Metro Alliance, Mirant’s refusal to cooperate is a clear violation of the Electric Power Purchase Agreement [EPPA] dated 24 December 1999, as well as the Contract of Sublease covering the substation’s occupancy of the property, not to mention various agreements with the National Power Corporation to operate the substation, among others.
As summarized in the demand letter of Metro Alliance, Mirant has the following options: Reconnect the substation to the petrochemical plant to meet its energy requirements, lease the substation to another operator who will supply to Metro Alliance, or sell the same to a third party.
With Mirant’s adamant refusal to cooperate, Metro Alliance claims that it has suffered running damages of about P300 million, and the possible pullout of its foreign investor. The present investment of both Metro Alliance and its foreign partner amounts to US$ 100million.
Mirant’s parent company is in the process of selling its interest in Mirant Asia Pacific, a Hong Kong based holding company which owns Mirant Philippines.
The Department of Energy officials have voiced their strong reservations on the said sale, pointing out that national interests are involved and that their approval must first be secured.
posted by philpower @ 8:45 PM,
