PSALM turns over Naga plant to new owner

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM), the agency tasked to privatize state-owned power assets, has turned over the 153.1-megawatt (MW) Naga power plant to its new owner, SPC Power Corp., despite controversies surrounding the sale.

PSALM made the final announcement in a notice signed by its president and chief executive officer, Emmanuel Ledesma Jr.

“Effective 10 a.m. on  Sept. 25, coinciding with the lapse of the operation and maintenance service contract (OMSC) of the Naga power facility, SPC is the new owner and operator of the Cebu-based power facility,” Ledesma said.

PSALM and SPC held the closing of the sale of the Naga plant on Sept. 23 in Makati City during which the two companies exchanged their closing documentary deliverables in simple ceremonies.

The agency held the bidding for the Naga power plant last March, with Therma Power Visayas Inc. emerging as the highest bidder with an offer of P1.09 billion.

SPC emerged as the second highest bidder at P859 million but the company chose to exercise its “right to top” the price of the winning bidder for the Naga plant by five percent, as provided under the land lease agreement executed between PSALM and SPC for the Naga land-based gas turbine in 2009.

Thus, in May, SPC paid PSALM P1.14 billion or five percent higher than the P1.09-billion offer of Therma Power.

In July, PSALM issued the notice of award and the certificate of effectivity to SPC together with one original executed copy of the final transaction documents, which consisted of the asset purchase agreement and the Land Lease Agreement for the sale of the Cebu-based power plant.

The Naga power plant consists of the 52.5-MW Cebu 1 and 56.8-MW Cebu 2 coal-fired thermal power plants, and the 43.8-MW Cebu diesel power plant 1 composed of six 7.3-MW bunker-C fed power units. Specifically situated in Colon, Naga City, Cebu, these power plants use a combination of coal, bunker C oil, and diesel as fuel.