Four investor groups have expressed interest to bid for the 146.5-megawatt (MW) Panay and 22-MW Bohol diesel power plants, the Power Sector Assets and Liabilities Management Corp. (PSALM) said yesterday.
PSALM said it is optimistic that it could reach the 70 percent privatization level this year after the sale of these assets.
“The government’s hope of achieving its privatization threshold target this year hinges on the four investors who will contend for the Panay-Bohol assets which will be auctioned off today,” PSALM said.
PSALM, the government power privatization firm, will conduct the scheduled sale of the Visayas-based power plants, hoping to fulfill one of the remaining requirements for the implementation of open access and retail competition in Luzon and the Visayas as stipulated in the Electric Power Industry Reform Act: the sale of at least 70 percent of National Power Corp.’s generating plants in the two grids.
The four investor groups, all Philippine corporations that have been actively participating in PSALM’s bidding exercises, are expected to submit their offers based on their respective assessment of the Panay-Bohol power assets.
The first round of bidding for the Panay-Bohol power plant package was launched last July 16 but it was eventually declared a failure after only one investor group submitted the preparatory sale requirements.
In its original asset sale schedule for 2008, PSALM packaged the Panay diesel plant with the 192.5-MW Palinpinon geothermal plant.
But because the long-term steam supply agreement to be attached to the Palinpinon plant still has to be approved by the Joint Congressional Power Commission (JCPC), the PSALM board decided to move the sale of the geothermal asset to 2009.
Under JCPC Resolution 2006-1, the agreement, now known as the geothermal resources supply contract, is subject to the commission’s approval.
The Panay diesel power plant facility consists of the 36.5-MW Panay 1 Diesel Power Plant and the 110-MW Panay 3 diesel power plant. Panay 1 was commissioned in 1979, while Panay 3, which is also known as the Pinamucan diesel power plant, was relocated from its Batangas site after the expiration of the BOT (build-operate-transfer) contract with Enron Power Development Corp. in 2003. The plant was transferred to its present location to prevent a potential near-term power shortage and to provide voltage stabilization in the island of Panay.
The Panay 1 and 3 diesel plants are the only land-based facilities of Napocor in the island. They are peaking plants that provide ancillary services such as backup power, load following, system frequency, and voltage regulation.
The Bohol diesel power plant, Napocor’s first diesel plant in the Island, was originally constructed together with the 1.2-MW Loboc hydro plant to provide electricity to nearby towns. Consisting of four 5.5-MW identical generating units, the Bohol facility continues to operate as a peaking and voltage-regulating plant.