In an official communique, Delta Power informed Napocor of its disinterest in acquiring the gas turbines and its intention to seek a return of its $2.4-million performance bond.
The UAE-based power firm won the public auction for the nine gas turbines besting the International Trade Management (ITM) of California, USA which offered a bid of $16.4 million. Delta Power was asked to file a performance bond by the Napocor before the transaction could be consumated.
More than half a year since it won the bidding, the foreign firm still had not filed the $2.4-million performance bond. Instead, the company asked Napocor for a 120-day extension promising to file the bond through a letter of credit (L/C).
Napocor senior vice president and chief operating officer Asisclo Gonzaga said the board only allowed for a 90-day extension while it doubled the performance bond to $4.8 million.
Gonzaga said the 90-day extension has lapsed and that they are accepting the withdrawal of Delta Power. However, Napocor is not inclined to return the performance bond.
The nine gas turbines are the three Malaya turbines with a capacity of 30-megawatts (MW) each, the 30-MW Sucat Turbine (built in 1993), and the four turbines in Bataan with a combined capacity of 120-mw (built in 1989). They will again be placed on the bidding block, officials added.
The sale of the nine turbines went through three biddings prior to the negotiated sale with Delta Power. ITM had made the first bid but it was declared a ‘failed bid’ due to the absence of a second buyer.
The price tag for the gas turbines started at $55 million but was reduced several times due to its failure to attract buyers. Likewise, the value dropped considerably due to the operating age of the gas turbines.
The gas turbines make up the last of their kind in Napocor’s assets for disposal. It will be recalled that it was also ITM that purchased the two 501F gas turbines also sold by Napocor. The first was sold in January 1999 and the second in August the same year.
Both turbines had a 100-MW generating capacity although the price differed. The first was worth $25-million while the second was sold at $32.5-million.
The two gas turbines were part of a settlement undertaken between the Philippine government and Westinghouse Electric Corp. of the United States. Westinghouse will hand over two gas turbines and some P400-million in cash to the Philippine government.