PSALM’s bidding fails for Manila thermal asset
The privatization salvo of Power Sector Assets and Liabilities Management Corporation this year for the land straddled by the Manila thermal power plant ended in a “failure” as no parties submitted offers.
So far this is the first divestment undertaken by the state-run company under its new president and chief executive officer (CEO) Irene Joy Garcia, which indicates then that the new management may need to work harder in attracting asset takers.
Garcia herself declared the public auction “a failure due to non-receipt of any bids.” The scheduled deadline on bid submission was 12 noon last August 15.
This then prompted the company to announce a “rebid process” for the real property asset, which was earlier set a minimum bid price of P885.746 million.
“PSALM will rebid the Manila thermal power plant land as soon as the roadmap for the second round of bidding is finalized,” the company said.
Garcia emphasized that they “will look into the reasons as to why the four (4) bidders, who initially purchased bid documents, decided eventually not to participate in the bidding.”
In most divestment exercises though, companies with initial interest in certain assets could end up having dampened appetite after undertaking due diligence processes – a reality that PSALM should have already been well oriented of.
The real property for sale spans an approximate area of 20,975 square meters – the site of the decommissioned Manila thermal plant previously owned by the National Power Corporation.
PSALM qualified that “the property has a potential commercial value because of its proximity to Manila’s business district.”
It was the plant that was first privatized on “scrap mode” in 2009 – the proceeds of which were partly utilized to retire some of PSALM’s maturing financial obligations.
The sale of the land, according to the state-run firm, “will help augment (its) funding sources for the management of its assumed liabilities.”
PSALM still has more than 1466 billion of outstanding liabilities to retire until the end of its corporate life in 2026 – which necessitates then that it shall accelerate the privatization of remaining NPC assets so it could get its hand on the money to partly fulfill that mandate.