Korean firm submits bid for Malaya TPP operation

AKorean firm submitted a bid to operate and maintain the Malaya Thermal Power Plant (TPP) for one year for P222.55 million.

The Power Sector Assets and Liabilities Management Corp. (PSALM) on Tuesday opened the bid of Soosan ens Co., Ltd., the lone bidder for a one-year operation and Maintenance Service Contract (OMSC).

The bid submitted is still subject to the detailed bid evaluation and postqualification activities. After which, it will be presented to the PSALM Board of Directors for the approval of the issuance of the notice of Award.

PSALM has approved a budget of P224,800,000 for the procurement of the OMSC. Soosan submitted a bid of P222,552,000.

The Malaya TPP in Pililla, rizal is being managed by PSALM through an OMSC. It was designated by the Department of energy (Doe) as a must-run unit (MRU) in 2014. As an MRU, it is called by the national Grid Corporation of the Philippines to run and provide security capacity during shortage in electricity supply caused by power plant outages to ensure system reliability of the Luzon grid.

In January last year, Soosan bagged the same one-year contract for P205.73 million. It was in charge of the day-today upkeep, management and maintenance or repair of the power plant and its equipment.

The Malaya TPP consists of a 300 -MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler. It was last rehabilitated in 1995 by Korea electric Power Corp. under a 15-year rehabilitate-operate-managemaintain agreement.

Meanwhile, the state firm has once again moved the deadline of bid submission for the privatization of the MTPP and its underlying land to September this year. It also moved the dates of other bidding activities due to the lockdown.

The new deadline for bid submission is on September 3 at 12 noon. The release of final Asset Purchase Agreement to qualified bidders, meanwhile, is set on August 20.

The issuance of notice of award is set on September 30.

PSALM will disclose the minimum bid price to qualified bidders immediately after securing the Board's decision on the matter. PSALM'S Board is awaiting feedback from the Commission on Audit relative to the request of PSALM to allow a discounting mechanism that would lower the minimum bid price.

This is PSALM’S third attempt to privatize the Malaya asset. PSALM has declared a failure of the second round of public bidding because there was only one bid. Pursuant to the bidding rules, PSALM then proceeded to go through the process of negotiated sale with the lone bidder, D.M. Wenceslao.

However, D.M. Wenceslao’s bid offer was below the minimum bid price. Thus, PSALM was constrained to also declare a failure of the negotiated sale.