PSALM to defer bidding for Naga power plant

MANILA, Philippines - Heeding the request of the Joint Congressional Power Commission (JCPC), the Power Sector Assets and Liabilities Management Corp. (PSALM) said it may defer the bidding of the Naga power plant complex in Cebu.

JCPC, created under the Electric Power Industry Reform Act (EPIRA) to oversee the privatization of the assets of the National Power Corp. (Napocor), decided to ask PSALM to temporarily halt the privatization of Naga amid allegations of unfair bidding procedures.

PSALM president Emmanuel Ledesma confirmed he had received a letter from JCPC on the Naga bidding but pointed out he has no official order from the PSALM board yet.

“I just received a letter request from JCPC to defer the bidding of the Naga plant. I have not yet received any instructions from the PSALM board on said request,” he said.

“The JCPC letter provides that the request is in view of various concerns raised about the bidding of the Naga plant which contains an allegedly unfair and illegal condition known as a right to top the highest bid,” he said.

“PSALM recognizes the powers of JCPC as an oversight committee and will defer to the instructions of the PSALM board,” he added.

Earlier, Ledesma said the bidding will push through on Oct. 10 and those who may want to prevent the bidding of the contracted capacity of the Naga plant “may file a case for injunction before the Supreme Court as stated in Section 77 of the Electric Power Industry Reform Act of 2001.”

The Naga complex consists of the 106.8-megawatt Naga coal thermal power Plants 1 and 2 and the 39-MW Naga diesel power plant located in Naga, Cebu.

Eight prospective bidders are eyeing the Visayas-based power facility. These investor groups are a mix of new and old participants in the power industry, some of which have formerly participated and have won in previous bidding exercises.

Ledesma said the Naga contract is actually a low-cost, low-risk technique of entering the Visayas electricity market.

“Transparency and accountability will continuously be ensured by PSALM throughout the bidding process,” Ledesma said.

House Deputy Speaker Lorenzo Tañada III earlier sought JCPC’s intervention on the issues involving the bidding of the Naga power contracts.

Tañada stressed to JCPC that SPC Power Corp.’s “right to top” the offer of other bidders is “anomalous.”

He then asked JCPC to require the PSALM to explain the “right to top” arrangement between SPC Power and PSALM, which puts the other bidders in a disadvantageous position.

The lawmaker also said PSALM’s warning that the delay in the bidding could impinge further on PSALM’s liabilities “does not look at the other side of the coin, which is maximizing revenues.”