DMCI submits highest bid for Calaca

MANILA, Philippines – DMCI Holdings Inc. of the Consunjis submitted the highest offer for the controversial 600-megawatt (MW) coal-fired power plant in a bidding conducted yesterday by the Power Sector Assets and Liabilities Management Corp. (PSALM).

DMCI offered $361.7 million for the Batangas-based power plant to edge out Thai firm Banpu Power Limited. PSALM did not reveal the bid of Banpu.

The Consunji-run company will be declared the winning bidder after PSALM verifies the accuracy, authenticity and completeness of all the bid documents that the consortium submitted.

Incorporated in 1995, DMCIHI is the firm that consolidates all construction business, construction component companies, and related interests of the Consunji family. Its core businesses include construction, real estate, and coal mining.

DMCI owns 56 percent of Semirara Mining Corp., which has exclusive rights to explore, mine and develop the coal resources on Semirara Island in Caluya, Antique.

The Calaca facility has been allocated a substantial 287-MW power supply contract, or about 48 percent of the plant’s rated capacity. This will provide the new owner a ready market for the electricity that the power plant will generate.

The Manila Electric Co. (Meralco) will assume the biggest portion of the contracted energy, which is equivalent to 169 MW.

If the sale of the Calaca facility pushes through, PSALM will be breaching the 70-percent targeted privatization level for generating assets in the Luzon and Visayas grids as one of the preconditions to the declaration of open access and retail competition stipulated in the Electric Power Industry Reform Act.

It will also move the Philippine electricity industry closer to the highly-anticipated era of open access and retail competition.

This significant milestone could have been achieved in 2008 had it not been for the decision of Emerald Energy Corp. (EEC), formerly Calaca Holdco Inc., the winning bidder in the last round of the Calaca bidding held on Oct. 16, 2007, to terminate its purchase of the asset.

EEC did not pursue its purchase of Calaca as it claimed that the power facility’s condition had deteriorated substantially. 

Sources said San Miguel Energy Corp. (SMEC) was supposed to partner with DMCI for the Calaca bid. Apparently, SMEC decided not to join the bidding.

SMEC consultant Alan T. Ortiz told reporters that DMCI had indeed wooed San Miguel to join then in vying for Calaca.

“DMCI negotiated with SMC,” Ortiz said.

San Miguel’s bid for Calaca should have been strategic as it also has stake in Meralco which will buy power from Calaca under the transition supply contract (TSC) attached to the sale of the coal-fired facility.