SMC to bid for 3 hydropower plant deals

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. has expressed interest in bidding for the management contracts of three huge hydropower facilities in Northern Luzon, an official of the Power Sector Assets and Liabilities Management Corp. (PSALM) said.

The official, who requested anonymity, said San Miguel’s energy investment arm, San Miguel Energy Corp., will bid for the hydropower plant contracts to further expand its formidable power portfolio which now includes the 620-megawatt Limay combined-cycle plant in Bataan and the 1,200-MW Sual coal-fired facility in Pangasinan.

San Miguel, Southeast Asia’s biggest food and beverage group, has been actively pursuing investments in heavy industries with a slew of acquisitions in power, oil, toll roads and telecommunications to tap into other revenue sources other than its core brewery business.

According to the PSALM official, San Miguel has submitted a letter of interest to pre-qualify for the auction of the hydropower plant package.

He also said the bidding for these plants will be moved by a month to Dec. 11 to give interested parties ample time to undertake their due diligence activities.

PSALM, the state agency tasked to oversee the privatization of the assets of the National Power Corp., earlier said it expects at least nine groups to join the bidding for the independent power producer administrator (IPPA) contract to manage the government’s contracted capacities in the Bakun, Benguet and San Roque hydroelectric power plants.

The PSALM source said the destruction brought by the recent typhoons failed to dampen the interest of investors as they all participated in the discussion of the bidding procedures.

The 70-MW Bakun hydropower plant in Alilem, Ilocos Sur is operated by the Aboitiz-owned Luzon Hydro Corp.; the 30-MW Benguet mini-hydro power plant in the Cordillera Administrative Region is run by the Hydro Electric Development Corp. (Hedcor) and the Northern Mini-Hydro Corp.; while the 345-MW San Roque multipurpose hydroelectric power plant is managed by Japanese firms Marubeni Corp. and Kansai Power International Corp.

In a separate interview, Conrad S. Tolentino, acting vice president for PSALM’s Asset Management and Electricity Trading Group, said the operators of the hydropower facilities have been very cooperative in providing the needed information for the potential bidders.

He said PSALM will use the two-envelope bidding system for the auction, as the bidders will have to submit separate bids for each of the contracted capacities to ensure qualification.