Six groups in shortlist for bid to manage output of Mindanao coal power plant

MANILA, Philippines - Six groups remain in the running for the privatization of the output of the 210-megawatt Mindanao coal-fired power plant in Misamis Oriental, an official of the Power Sector Assets and Liabilities Management Corp. (PSALM) said.

Originally, 12 power companies expressed interest in administering the output of the Mindanao power plant last April. These are Conal Holdings Corp., FDC Davao Del Norte Power Corp., FirstGen Northern Power Corp., GDF Suez Energy Philippines Inc., Masinloc Power Partners Co. Ltd., Meralco Powergen Corp., Nexif Pte Ltd., SMC Global Power Holdings Corp., SPC Power Corp., Team (Philippines) Energy Corp., Vivant Energy Corp. and Therma South.

PSALM president and CEO Lourdes Alzona said the reduction is not a result of waning interest in the power plant as some of the firms decided to form a consortium to participate in the bidding.

“Around 10 or 11 companies bought bid documents (for the management contract for the output of the Mindanao plant). From there, some firms decided to jointly bid, that’s why it’s reduced to six groups,” she explained.

PSALM, the government agency tasked to sell state-owned power assets, said it will proceed with the privatization of the Mindanao coal plant’s output despite the Department of Energy’s directive to delay it until the second half or on Sept. 23, 2015.

This is because the winning independent power producer administrator (IPPA) could dictate electricity prices amid the power supply shortage in Mindanao.

The state-owned agency said it would mandate a constant rate for two to three years to prevent that from happening.

Alzona said the companies were aware of the three-year lock-in period, which will still be up for “further evaluation” on the bidders’ part.

Mindanao coal plant in Misamis Oriental is operated by Germany’s Steag State Power Inc. under a 25-year build-operate-transfer power purchase agreement scheme until 2031.