PSALM sets bidding for 600-megawatt Calaca plant today

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM) will bid out the 600-megawatt (MW) Calaca today (July 8).

PSALM said at least four qualified bidders are expected to attend the bidding.

According to PSALM sources, one of the four bidders is a foreign group.

An industry source earlier said International Power Plc, which has an office in Hong Kong but is London-based, is eyeing to buy the coal-fired facility. International Power earlier vied for Mirant Philippines assets.

Earlier, Aboitiz Power Corp. (APC) and San Miguel Energy Corp. have expressed interest to participate in the Calaca auction.

In May this year, 11 groups have participated in the pre-bid conference of the Batangas coal-fired thermal power plant (BCFTPP).

The prospective bidders, consisting of local and international entities, expressed keen interest in acquiring the BCFTPP after Emerald Energy Corp. (EEC), the winning bidder in the third round of bidding for the Calaca facility held on Oct. 16, 2007, chose to terminate its purchase of the asset in January 2009 due to alleged deterioration of the power plant.

PSALM decided to conduct a negotiated sale for the Calaca plant after two failed bids and following EEC’s termination of its purchase.

In a negotiated sale, PSALM can bid out the BCFTPP even if there is only one qualified bidder, and will award the facility to the highest bidder who meets the government’s reserve price.

The privatization of the Calaca facility will clinch the 70 percent privatization level stipulated in the Electric Power Industry Reform Act, one of the preconditions to usher in the regime of open access and retail competition.

The BCFTPP was first offered to prospective investors on May 18, 2005, but the bidding was canceled after two of the three qualified bidders backed out shortly before the deadline for the submission of offers.

The second round of bidding held on April 27, 2006 was also declared a failure because the price proposals submitted by the two bidders were below the reserve price.