Chinese firms among 40 bidders for 2 power plants

At least 40 foreign and local companies have expressed interest in bidding for the two decommissioned plants of the National Power Corp. (Napocor) set to be auctioned off within this year, a ranking Power Sector Assets and Liabilities Management Corp. (PSALM) official said.

PSALM vice president for asset management and disposal Froilan Tampinco said most of the interested bidders are Chinese firms.

He said they intend to put in the auction block in the last quarter of the year either the Bataan Thermal or Manila Thermal power plant, both decommissioned power facilities. 

Tampinco said PSALM has decided to sell these power plants as scraps.

The PSALM official has admitted that while they plan to sell either of these two decommissioned power plants, they have yet to firm up the terms of reference (TOR) for the bidding .

"We have yet to decide on the TOR. We have to make sure that those that will bid are qualified and has capacity to pay for the plants," he said.

He said one of the areas in the TOR that they are closely looking at is the bid security. "If possible, we are trying to put a quite significant bid security so that not just anybody could comply."

Tampinco said they are also making sure that they have the correct valuation for each of the decommissioned asset that would be sold. "We have to make sure that we have the right weight. It will depend on the equipment in the plant that we will sell."

Recognizing the difficulties tied to the disposal of the retired plants of Napocor, PSALM decided in April this year to hire the services of a third party auctioneer as an alternative strategy in the auction of these decommissioned facilities.

The main function of the third party auctioneer, who will provide a comprehensive asset disposal service to PSALM, involves formulating an appropriate sale strategy and methodology for the decommissioned power plants. This includes the administration of an inventory of the assets, the preparation of the assets, the strategic conduct of the auction, and the removal of the assets from their respective sites.

Napocor currently has at least five retired plants in its portfolio: the 225- megawatt (MW) Bataan (bunker), the 54-MW Cebu II (diesel), the 200-MW Manila (bunker), the 22.3-MW General Santos (diesel), and the 108-MW Aplaya (diesel) power plants.

By engaging the services of a third party auctioneer, PSALM hopes to gain ground in selling these decommissioned power facilities, three of which underwent unsuccessful bidding exercises in 2005.

The Bataan thermal plant, which is scheduled for a negotiated sale this year, underwent two rounds of failed biddings in April and September last year.

The first auction for both the Cebu II and Manila plants held in the first quarter of 2005 were declared failures.