PSALM assures privatization on track despite Masinloc setback

The Power Sector Assets and Liabilities Management Corp. (PSALM) has assured that the privatization of other generating assets of the National Power Corp. (Napocor) will continue despite a major setback encountered in the sale of the 600-megawatt (MW) Masinloc power plant.

Masinloc was supposed to be the first big-ticket item sold by PSALM and should have been the government’s benchmark in selling a power plant without a supply contract.

PSALM vice president for asset management and electricity trading Froilan Tampinco said the company is specifically bent on moving ahead with the auction of the Napocor generation assets this year.

PSALM, the agency mandated to privatize the assets of the Napocor, made the assurance to quell unfounded speculations that the government’s privatization program for the electric power industry will be hampered because of the failure of YNN Pacific Consortium to meet the June 30 deadline to deliver the $227.54 million upfront payment. PSALM has called on the $14-million performance bond.

"The government’s restructuring and privatization program for the power industry will not be hindered because we’re moving ahead with the bidding for the assets of Napocor scheduled this year," Tampinco said

The PSALM official added that "It is incumbent upon PSALM to be at the forefront in implementing the necessary reforms in the power sector."

Tampinco’s assurance is a welcome development for bidders of the 100-MW Pantabangan and 12-MW Masiway hydroelectric power plants, the 275-MW Tiwi and 425.73-MW Makban geothermal facilities, and the 360-MW Magat hydropower plant whose sale processes are still ongoing.

He said that investors who have expressed interest in joining the bidding exercises could continue with their due diligence for these plants. The bid date for each plant package will be set by PSALM.

Seven bidders have also signified their intention to bid for the 25-year concession of the National Transmission Corp. (TransCo) slated in September 2006. Of the seven groups who have submitted their expressions of interest to PSALM, five have received their bid documents and are now starting their due diligence for TransCo.

In other development, Ranhill Berhad, the supposed partner of YNN Pacific Consortium in the purchase of Masinloc, disclosed in its local bourse that it would continue to buy out YNN Pacific.

"On behalf of Ranhill’s Board of Directors, we are pleased to announce that Bank Negara Malaysia had on 29 June 2006 approved the remittance of funds by Ranhill to Moretta Finance BV, an indirect wholly-owned subsidiary of Ranhill, pertaining to the consideration for the proposed acquisition," the company said. Ranhill is proposing to buy the entire shares in YNN at $8 million.