PSALM turns over Naga power plant land lease pact to Salcon

State-run Power Sector Assets and Liabilities Management Corp. (PSALM) has turned over the land lease agreement for the Naga Power Plant Complex to publicly-listed Salcon Power Corp.

PSALM said it has transmitted the agreement to the power firm last Dec. 19 and was signed by Salcon president Dennis Villareal.

The execution of a new land lease agreement is a requirement before a new power facility can be built inside the Naga power plant complex in efforts to meet Cebu’s increasing demand for electricity starting in 2007.

The plant complex is being leased, operated and managed by Salcon under a rehabilitation, operation, maintenance and management agreement it entered with National Power Corp. (Napocor) on March 25, 1994.

The new plant will be a joint venture of Salcon and Kepco Philippines Corp. (Kephilco), a wholly-owned subsidiary of Korea Electric Power Corp. (Kepco) that controls the generation, transmission and distribution of electricity in Korea.

Kephilco has a rehabilitate-operate-maintain contract for the 650-megawatt (MW) Malaya Thermal power plant in Pillilia, Rizal.

The Korean-Filipino power firm also has a build-operate-transfer contract for the 1,200-MW Ilijan natural gas power project in Ilijan, Batangas.

Aside from the Ilijan expansion, Kephilco is also pursuing a 200-MW coal power plant in Cebu, which is scheduled for groundbreaking ceremonies today. The Cebu plant is in partnership with Salcon.

The proposed coal power plant is targeted to go on line by 2008 for the first 100-MW and the next phase of 100-MW by 2009. The projected is estimated to cost P15 billion.

The plant is designed to utilize a circulating fluidized bed combustion technology and is lined up to use the coal being produced from the Semirara mining facility, in Antique province or those from the coal mines in Malangas, Zamboanga.

Kephilco will also invest $50 million to build the Luzon-Mindoro submarine cable. Kepco is advancing the funding for the construction of the 230-kilovolt line.

Kepco is pushing for the submarine cable project to "create a market" for its 1,200-MW Ilijan natural gas power plant.