New terms for Malaya plant auction being readied, Energy dep’t says

THE Power Sector Assets and Liabilities Management Corp. (PSALM) is preparing new terms for the bidding of the 650-megawatt (MW) Malaya thermal power plant, giving rise to the possibility that the facility will attract other interested bidders.

“[ The bidding] is deferred until further notice,” said PSALM officerin-charge Lourdes S. Alzona in a phone interview after the agency withdrew the schedule to bid out the project on Thursday, March 30.

She said the agency has yet to finalize a new schedule for the bidding while it was evaluating options for the power plant. The deferral came after the Department of Energy (DoE) set a new condition to privatize the asset: its conversion into a liquefied natural gas (LNG) plant.

Energy Secretary Alfonso G. Cusi said last month that Malaya’s output must support the need for standby capacity, thus the decision to set the condition.

“We are evaluating the options, and from there we will set the actual date,” Ms. Alzona said.

But she said the four entities that earlier submitted “letters of intent” for the project were still under the prequalification process.

In December, PSALM said it received the letters from APT Global, Inc., Phinma Energy Corp., Riverbend Consolidated Mining Corp. and AC Energy Holdings, Inc. They filed the required documents by the 5: 00 p. m. deadline on Dec. 20. The bidding was originally scheduled on March 8, but was moved to March 30.

Malaya thermal power plant in Pililla, Rizal has two units, with the first one — at 300 MW — commissioned in August 1975 and the second in April 1979, information from PSALM’s website shows.

Fired by bunker fuel, the plant is operated by the National Power Corp.

Asked whether other bidders will be allowed to participate, Ms. Alzona said the decision will depend on the options to be decided and whether new terms will be issued.

“It still depends. It’s not yet too firm,” she said. “It’s still under evaluation ... it’s the policy direction of the DoE.”

She said the four companies that sent letters of intent were informed of the deferral. She said their number could be trimmed once the evaluation is completed.

Phinma Energy did not immediately respond when asked to comment on PSALM’s decision. But AC Energy Holdings, Inc. said the condition to convert the Malaya plant into a gas- powered facility is a “material change” from the previous terms.

“It’s a material change because before, there was uncertainty whether you will be allowed to convert that facility to something else with the DoE consent,” said John Eric T. Francia, AC Energy president and chief executive.

“But now you are saying that the facility will be an LNG facility,” he said. “Those two are very different so I think they will need to rebid that.”

Under previous terms, PSALM said it was selling the Malaya plant on an “as is, where is” basis, thus disclaiming liability for the state of the facility being sold. Only parties that submitted a letter of intent by the submission deadline will be allowed to participate further in the privatization of the asset.

The agency said the interested parties that submitted the letter of intent must be the same ones that will participate in the privatization process. They should also be the ones to bid and enter into the pertinent agreements. —