DMCI bags power generation contract

The Consunji family’s DMCI Holdings Inc. edged out its rivals in the bidding for a power generation contract in an off-grid area in Masbate.

In a disclosure to the Philippine Stock Exchange, DMCI said the National Power Corp.’s Bids and Awards Committee has chosen it as the "qualified winning bidder in the competitive selection process completed last Nov. 15 of the private sector participation in power generation in Masbate."

DMCI vice-president and chief financial officer Herbert Consunji said this project will be managed and carried out through wholly-owned subsidiary DMCI Energy Resources Unlimited Inc.

DMCI Energy was formed by the group to pursue investments in the power sector. It has an initial paid-up capital of P10 million.

The award is subject to the delivery and/or compliance with bidding procedures and transaction documents, Consunji said.

Other groups that reportedly joined the auction include Vivant Corp. of the Aboitizes and Garcias, and Masbate Progress Power Corp., a consortium led by construction giant EEI Corp.

DMCI owns about 63 percent of Semirara Mining Corp., the country’s largest producer of coal. Semirara sells the bulk of its coal to the state-owned Napocor.

DMCI was also one of two bidders for Napocor’s 600-megawatt Calaca coal-fired power plant in Batangas. The bidding, held in May last year was declared a failure as the offers were below the reserve price.

The DMCI group, together with Metro Pacific Investments Corp. recently won the auction for the government’s 83.97-percent stake in debt-strapped Maynilad Water Services Inc., with its bid of $477.23 million topping the Ayala-led consortium’s bid of $399.99 million.

Maynilad provides water concession in the western part of Metro Manila which covers about six million customers in Manila, Makati, Quezon City and the whole of Malabon, Navotas, Muntinlupa, Caloocan, Pasay, Parañaque, Las Piñas, Valenzuela and Cavite towns.

DMCI Holdings reported a net income of P185.77 million in the third quarter of 2006 or an increase of 41 percent from the previous level, mainly due to higher revenues from its real estate unit which offset the revenue drop at its coal and construction businesses.

In the nine months ending September this year, however, DMCI’s net profit fell 60 percent to P1.03 billion from P2.57 billion a year earlier due to the absence of extraordinary gains and higher costs and income taxes. The 2005 nine-month net profit included a one-time gain from the sale of shares in coal unit Semirara Mining Corp. amounting to P2 billion.

Semirara, on the other hand, reported a 31 percent drop in net profit during the nine-month period in 2006 to P571.21 million from P828.83 million.