7 groups expected to bid for 600-MW Masinloc plant today

Seven investor groups are expected to submit bids in today’s re-auction for the 600-megawatt (MW) Masinloc coal-fired power plant in Zambales, the Power Sector Assets and Liabilities Corp. (PSALM) said.

“We are pleased with the turnout in the number of prospective bidders. This is a strong indicator that investor interest in the power assets is sustained following the successful bids of three hydro plants in 2006, and that key improvements in the sale structure are responsive to the concerns of the investor community,” said PSALM president and chief executive officer Jose C. Ibazeta.

He said some of the prospective bidders that sent formal letters of interest in April have organized themselves into consortiums, while other bidders were not able to submit or meet the documentary requirements to further participate in the privatization of the asset.

The privatization of Masinloc was launched in March, with two pre-bid conferences held in May and June to brief investors on the bid procedures and transaction documents, as well as discuss concerns on the bid package, including the transition supply contract (TSC).

PSALM negotiated with the National Power Corp. a supply contract of 264.514 MW for Masinloc, assuring the winning bidder a ready market for the plant’s power output.

The first round of bidding for Masinloc was held in 2004, with Autralia’s YNN Pacific-led consortium offering a winning bid price of $560 million for the plant. The sale, however, was not consummated due to the failure of the group to deliver the 40 percent upfront payment of $270 million in June 2006.

PSALM forfeited the performance bond of $14 million in July 2006 and terminated the sale contract effective August 2006.