PSALM, NPC Masinloc supply deal stalled
Friday, March 16, 2007
By MYRNA M. VELASCO
The Power Sector Assets and Liabilities Management Corporation (PSALM) and National Power Corporation (NPC) are still on a deadlock on the negotiations for the transition supply contract (TSC) to be assigned to the 600-megawatt Masinloc coal-fired power facility due for re-bidding in July this year.
But both parties indicated optimism that the remaining concerns will be resolved before the bidding date. Sources, however, did not identify the specific issues still needing some sorting out.
PSALM proposed a supply agreement that would cover 70 percent of Masinloc’s running capacity by the time of its divestment.
Even with the TSC yet to be finalized, PSALM already issued yesterday the tender notice signaling the start of rebidding process for the Masinloc facility of which first sale attempt was botched because of the winning bidder’s failure to deliver on its commitment under the asset purchase agreement.
Majority of Masinloc’s prospective bidders, however, stressed the importance of the TSC being in place before PSALM could have put out invitations to bid.
For instance, most of the interested foreign investors noted that the TSC would be the most critical enticement they can present to their principals so they could finally be given the go-signal to participate in the auction for the coal generation asset.
Some local companies, however, expressed willingness to bid for Masinloc even on a merchant basis; noting that they can run to the Wholesale Electricity Spot Market (WESM) as alternative.
All eyes are currently focused on PSALM on how well it would handle the rebidding exercise for the coal plant; given also the brave words of its newlyinstalled president Jose C. Ibazeta that there will likely be no more failed biddings during his reign.
posted by philpower @ 7:21 AM,
