PSALM speeds up sale of Napocor’s generating assets

The Power Sector Assets and Liabilities Management Corp. (PSALM) is accelerating its efforts to dispose of at least half of the generating assets of the National Power Corp. (Napocor) by year-end and complete its privatization program in the third quarter of 2006.

PSALM is targeting to sell to the private sector this year, more than 1,300 megawatts (MW) of generating capacity of five major power facilities, including several decommissioned plants. This would comprise 50 percent of generating assets.

"We have re-arranged the scheduled sale of the power plants. We decided to put on the auction block this year the power plants that are saleable to investors. If we are successful in selling these, then we will achieve 50 percent of our target," said PSALM vice president for asset management disposal Froilan Tampinco .

To date, only 14 percent of Napocor’s power generation assets were privatized.

PSALM, which is mandated to implement Napocor’s privatization, will offer to investors this year, the 600-MW Calaca coal-fired thermal power plant in Batangas, 112-MW Pantabangan-Masiway hydro complex in Nueva Ecija and the 585-MW Tiwi-Makban geothermal complex in Albay and Laguna.

Among the decommissioned plants, PSALM will sell the Manila and Bataan thermal plants, Cebu and General Santos diesel-fired power plants.

With a revised privatization schedule, PSALM is confident it can sell 100 percent of Napocor’s generating assets by end-September next year.

"We are really working on getting those power supply contracts, as well as operational and management (O&M) contracts signed to make the assets more attractive to investors. We are also employing a preliminary asset review on the plants to give prospective investors more time to look at the asset," said Tampinco.

PSALM failed to meet its previous target to sell 50 percent of Napocor’ assets last June and increase this to 70 percent by end-December. Several unresolved issues however, forced PSALM to revise its targets.

Instead, PSALM will sell 70 percent of the generating assets within the first quarter of next year.

The government began privatizing state-owned power plants in March 2004 as part of the restructuring of the power sector.

Currently, only six of the more than 30 power plants lined up for sale were sold, generating revenues of $566.95 million or P31.75 billion.

Turned over to the private sector are the 3.5-MW Talomo hydroelectric plant (HEP) located in Barrio Mintal, Talomo, Davao City; the 1.6-MW Agusan HEP in Manolo Fortich, Bukidnon; the 1.8-MW Barit HEP in Buhi, Camarines Sur; the 0.4-MW Cawayan HEP in Sorsogon City, Sorsogon; the 1.2-MW Loboc HEP in Bohol; and the 600-MW Masinloc power facility.

PSALM has to speed up the disposal of Napocor’s assets in time for the operation of the wholesale electricity spot market (WESM) and open access slated in mid-2006.