Bidding for Malaya power plant fails

MANILA, Philippines - The bidding for the contract to manage the output of the Malaya thermal power plant in Rizal province was declared a failure yesterday as only one bidder – First Gen Corp. – submitted an offer.

The state-run Power Sector Assets and Liabilities Management Corp. (PSALM) said the bidding failed since First Gen was the sole proponent for the  contracted capacity of the 650-megawatt of the Malaya power plant.

PSALM rules state that the auction for any government power asset or contact will be considered a failure if only one bidder shows up and makes an offer. Two failed biddings for the same asset or contract will then warrant a negotiated bid.

It would be noted that there were two other pre-qualified groups for Malaya – the Romero-led Pacifica Inc. and Phinma’s Trans-Asia Oil and Energy Development Corp. – but both did not submit an offer.

“We will rebid (Malaya) but there is no date for that yet,” PSALM sources said.

In a separate interview, First Gen senior vice president Ernesto Pantangco confirmed that they have submitted a bid, pointing out that the Malaya contract would be a value-added to the company.

He described the model for the independent power producer administrator (IPPA) as very straightforward, and the Malaya power plant is a “good asset.”

“I really don’t know why they did not bid. For us, the mere fact that we submitted a bid, we will bid again once they offer it again. It’s our way of supporting the privatization efforts of the government,” Pantangco said.

Korea Electric Power Corp.(Kepco) currently operates the Malaya thermal plant. The winning bidder of the power plant’s capacity will handle the sale of its electricity output and procure its fuel. 

The Department of Energy (DOE) said the failure of the bidding for Malaya may somewhat derail the open access scheme which is envisioned to be in place within the year. 

Energy Secretary Jose Ibazeta said they are just waiting for the privatization of Malaya power plant’s contract to pave the way for the open access regime.

Open access will allow bulk power users or those with one megawatt (MW) power usage a choice where to source their requirements.

Ibazeta said once the sale of privatization of the independent power producer (IPP) contract of Malaya has been finalized, open access will surely be implemented.  

PSALM is the agency mandated by the Electric Power Industry Reform Act of 2001 to privatize at least 70 percent of National Power Corp.’s power plants and its contracts with third party power generators