PSALM lowers Malaya plant bid price

THe Power Sector Assets and Liabilities Management Corp. (PSALM) is selling the 650-megawatt (MW) Malaya Thermal Power Plant (MTPP) and its underlying land for P2.188 billion, 51 percent lower than the state firm’s previous offer price.

The state firm said Thursday that the board has set the minimum bid price (MBP) for the privatization of the power facility at P2,188,400,000. PSALM took into account 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 plant, the effects of the Covid-19 pandemic on marketability, the electricity demand, and the need to have a justifiable price that would lead to a successful public bidding.

Third party consultant, the Isla Lipana & Co. Pricewaterhouse Cooper Global Network, assisted in this activity. The MBP in the last public bidding as well as in the negotiated sale stood at P4,481,796,017.

PSALM submitted last August 25 the MBP to the Commission on Audit for approval. It also forwarded supporting documents and the detailed explanation on how the PSALM Board arrived at the said price.

“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.

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, PSALM President and Ceo Irene Besido Garcia said.

Deadline for submission of bids is set on September 23. All bids will be opened on the same day.

This is PSALM’S third attempt to privatize the Malaya asset. PSALM conducted two rounds of public bidding for the sale of said assets on September 18, 2019, and on November 22, 2019. However, both bidding exercises were declared a failure due to lack of interested bidders.