Government sets minimum bid for Malaya plant at P2.2 billion

MANILA, Philippines — State-run Power Assets and Liabilities Management Corp.(PSALM) has set the minimum bid price for the privatization of the 650-megawatt Malaya Thermal Power Plant (MTPP) and its underlying land at P2.2 billion.

“PSALM submitted this minimum bid price to the Commission on Audit (COA) on Aug. 25 together with the supporting documents and the detailed explanation on how the PSALM Board arrived at the said price,” the company said.

The state-run firm earlier asked the COA to allow it to lower the bidding price of the MTTP after two rounds of failed bidding.

PSALM said its board of directors took into consideration various valuation methodologies and relevant factors in setting the minimum bid price.

Among these factors include the book value of the asset, the zonal value of the land, the substantial losses incurred and continue to be incurred by PSALM in maintaining the MTPP, the effects of the COVID-19 pandemic on marketability, electricity demand and the need to have a justifiable price that would lead to a successful public bidding.

Third-party consultant Isla Lipana & Co. Pricewaterhouse Cooper Global Network assisted in the activity.

“There were many considerations that had to be looked into by the PSALM board in setting the minimum bid price, but foremost is the need to arrive at a fair and reasonable minimum bid price that would actually lead to a higher probability of a successful privatization,” PSALM president and CEO Irene Besido Garcia said.

“We need to privatize the Malaya power plant this year so that the proceeds of the sale can be used to settle maturing obligations this year and minimize PSALM’s borrowings,” Garcia said.

Bid submission deadline is on 12 noon of Sept. 23, after which the opening and evaluation of bids will immediately commence, according to PSALM.

“All bids are to be submitted at the PSALM’s office located at the 24th Floor of Vertis North Corporate Center 1, North Avenue, Quezon City,” it said.

PSALM had conducted two rounds of public bidding for the sale of the Malaya assets last year. Both bidding exercises, however, were declared a failure due to lack of interested bidders.

After the second round of bidding, PSALM proceeded with a negotiated sale with a lone bidder. However, it was also declared a failure after receiving a bid price below the floor price set for the assets.

The minimum bid price in the last public bidding, as well as in the negotiated sale was P4.48 billion.

Moreover, PSALM held a pre-bid conference for the privatization of five small value real estate assets located in General Santos City, Loboc, Magdalena, Sudipen and Camalaniugan.

The 1,868-square-meter asset in General Santos City is near the shoreline of Calumpang and in close proximity to an industrial zone. The minimum bid price is P10.97 milion

In contrast, the Loboc property in the province of Bohol is composed of four lots with a total land area of 13,204 square meters. Its minimum bid price is P12.139 million.

Also up for bidding is the land in Magdalena, Laguna made up of 20 lots totaling to 270,390 square meters with a minimum bid price of P27 million

The property in Sudipen, La Union is composed of three lots with total area of 2,041 square meters and a minimum bid price of P3.17 million while the 2,148-sqm lot in Camalaniugan, Cagayan has a minimum bid price of P3.2 million

The deadline for the submission of bids is on Sept. 30.