PSALM targets sale of Angat hydropower plant in March

MANILA, Philippines - The Power Sector Assets and Liabilities Corp. (PSALM), the government corporation tasked to pursue state-owned power assets, is targeting to close the sale of the Angat hydropower plant in March.

Originally, the agency had targeted to close the sale of the plant to K-Water Resources Corp. of Korea this month but its president, Emmanuel Ledesma, Jr., said there are still two major issues that need to be threshed out.

 â€œThere are two more issues. Once we get those issues done, it should be okay,” Ledesma said.

The two issues are related to requirements needed by K-Water to own and operate the plant.

Ledesma declined to elaborate on the pending matters but confirmed that one issue of these is the business permit.

 â€œWe are already in talks with local officials (for the business permit),” he said.

PSALM sold the 218-megawatt Angat power facility to K-Water Resources Corp. of Korea.  It issued the certificate of effectivity (COE) to K-Water in September last year and is supposed to close the sale within 270 days from the issuance of the COE.

The agency conducted a bidding for the $440.88-million facility as early as 2010.

K-Water topped the bidding but was unable to take over the plant due to thorny issues including court hurdles raised by non-government organizations (NGO) on the foreign takeover of a power asset.

However, the Supreme Court upheld last year the privatization of the power plant but K-Water had negotiated with the government for a lower price tab on the facility, saying that it wanted the same level of benefits expected in its 2010 bid.

Energy Secretary Carlos Jericho Petilla and K-Water officials have been in talks for months before finally reaching an agreement, which led to awarding of the COE in September.

In the end, K-Water agreed to the original bid price of $440.88 million. K-Water partnered with diversified conglomerate San Miguel Corp. to run the power facility.

The privatization of Angat, once completed, would be the first successful power asset sale under the Aquino administration, as mandated under the Electric Power Industry Reform Act of 2001.