Marubeni pushes partial rehab of Tiwi power plant

Marubeni Philippines Corp. is urging the National Power Corp. (Napocor) to push through with the partial rehabilitation of the Tiwi geothermal power plant as its financing from the Japan Bank for International Cooperation (JBIC) will expire by March 2002.

Documents obtained by reporters showed that Napocor has temporarily halted the rehabilitation of the Tiwi geothermal plant in Albay because the Napocor technical working group (TWG) has raised concern over the need to rehabilitate the plant either fully or partially.

The TWG is now awaiting an opinion from the National Economic and Development Authority (NEDA) on this issue.

However, Marubeni said it has submitted a performance guarantee to Napocor which confirms that partial rehab would enable the Napocor to bring the plant’s performance to 100 percent.

This means that Marubeni would assure that if ever the plant is not able to operate 100 percent after the partial rehab, the company will work out to reach the guaranteed level.

The company pointed out that the scope of the partial rehab was already reviewed and approved by a Napocor consultant who is aware of the difference between a partial and full rehab.

According to Marubeni, a full rehabilitation would entail an additional cost of $25 million which will be a burden for Napocor considering the state-owned firm’s current financial condition.

Moreover, it noted that the full rehab of the Tiwi geothermal plant would take more time and would conflict with Napocor’s plan to sell all its generation assets on the second quarter of 2002.

Marubeni said in case Napocor decides to conduct a full rehabilitation of the plant, it will also take time since it will have to be approved again by NEDA and has to renegotiate the price and scope with Marubeni and Mitsubishi, the winning bidder for the partial rehab of the plant.

It was noted that the concept of partial rehabilitation was undertaken taking into consideration the financial standing of Napocor.

"The concept of partial rehabilitation was created based on the understanding that Napocor wants to minimize their debt as much as possible and also is looking at the most cost effective way to bring plant performance back to original condition," it said.

It said for this purpose, Marubeni and Mitsubishi have decided to prioritize the most important scope of work in the plant. The new owner of the plant, it said, could continue to carry out the other needed works once it is privatized.

Napocor president Jesus Alcordo ordered the review of the Tiwi rehab contract with Marubeni.

In March this year, Marubeni bagged the ¥4.24-billion (P1.7- billion) contract for the partial rehabilitation of the state-owned power firms’s Tiwi geothermal power plant complex in Albay.

The contract with Marubeni was supposed to rehabilitate Tiwi plant units 1,2,5 and 6. The Tiwi geothermal complex has an installed capacity of 330 megawatts (MW), and consists of six generating units capable of producing 55 MW each. — Donnabelle Gatdula