MANILA, Philippines — State-run Power Sector Assets and Liabilities Management Corp. (PSALM) will re-evaluate the marketability of the 650-megawatt Malaya Thermal Power Plant (MTTP) and its underlying land in Pililla, Rizal after another round of failed bidding.
In a statement, PSALM said the two pre-qualified bidders – Panasia Energy Inc. and AC Energy Philippines Inc. – did not submit a bid for MTPP by the 12 noon deadline of Sept. 23.
The minimum bid price was set at P2.19 billion, lower than the floor price of P4.48 billion in the previous round of bidding.
PSALM said Panasia submitted a letter indicating that it decided not to submit a financial bid.
“Given the significant amount of the reserve price provided under SBB No. 11 dated Sept. 11, the purchase of the assets is not financially viable for Panasia,” the company said.
Similarly, AC Energy wrote PSALM a letter expressing regret it would not be able to participate in the bidding.
“In our attempt to meet the minimum bid price, we have factored in all the possible material considerations. Unfortunately, despite the said efforts, we are unable to meet the same,” AC Energy said.
“The PSALM board already rationalized and lowered the minimum bid price of Malaya in the hope that the bidders would be encouraged to submit their bids. It is regrettable that despite the reduced minimum price, still no bidder submitted a bid,” PSALM president and CEO Irene Besido-Garcia said.
“We will need to get board approval to immediately commence the negotiated process of privatization. PSALM must exhaust the available legal process to dispose of Malaya because we are incurring substantial losses in continuously maintaining it,” she said.
“The average annual net loss of PSALM if based on the years that it is running as a must-run unit (2015 to 2019) is P556.2 million,” PSALM said.
PSALM earlier asked the Commission on Audit to allow it to lower the bidding price for 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 will lead to a successful public bidding.