PSALM to bid out Ilijan gas plant contract

MANILA, Philippines - State-run Power Sector Assets and Liabilities Management Corp. (PSALM) will bid out the contract to manage the 1,200 megawatt (MW) Ilijan natural gas power plant on April 16.

PSALM, an entity created under the Electric Power Industry Reform Act (EPIRA) of 2001, has already issued the invitation to bid (ITB) the other day.

If the bidding of the Ilijan contract proves successful, PSALM will be able to hurdle the 70-percent privatization threshold for independent power producer (IPP) contracts in the Luzon and Visayas grids this year.

The ITB  for the IPP administrator (IPPA) to manage the Ilijan capacity, which signals the start of PSALM’s sale process for the Batangas-based power asset, will be published for three consecutive days in local newspapers.

Interested investors wishing to participate in the bidding are required to submit their letter of interest not later than Jan. 29.

PSALM will hold a pre-bid conference for the Ilijan IPPA contract on Feb. 11.

The Ilijan IPP plant is being operated by Korea Electric Power Corp. (Kepco) through Kepco Ilijan Corp.

The EPIRA requires PSALM to privatize at least 70 percent of the contracted capacities of the IPPs in the Luzon and Visayas grids, the remaining precondition to the implementation of open access and retail competition.

PSALM also intends to put on the auction block this year the Unified Leyte and Malaya power plants. The Ilijan natural gas plant has a take-or-pay contract with its gas suppliers.