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Five firms keen to negotiate sale of P1.85B Malaya plant

FOUR Filipino companies and a Chinese construction firm have expressed interest in 650-megawatt Malaya thermal power plant through a negotiated sale, the state agency tasked to sell the asset said about a month after reducing its floor price prompted by several failed bids.

Over the weekend, the Power Sector Assets and Liabilities Management Corp. (PSALM) said it had received letters of interest (LoI) from companies that wanted to take part in the negotiated sale of the plant and its underlying land in Pilila, Rizal.

State-led PSALM identified the companies as Sta. Clara International Corp., VBB Trucking Trading and Consultancy Services, Inc., Fort Pilar Energy, Inc., AC Energy Philippines, Inc., and foreign firm China Gezhouba Group Co., Ltd.

The five companies, which submitted the letters of interest on or before the deadline, are allowed to participate in the third round of the Malaya plant’s negotiated sale, according to PSALM’s rules.

“PSALM looks forward to a successful privatization process for the Malaya Power Plant. We are excited that five firms expressed interest to join the process. We have lowered the minimum offer price already. Hopefully, this round will allow us to finally sell the Malaya Power Plant,” PSALM President and CEO Irene Joy Besido-Garcia said in a statement.

The agency said the minimum price offer for the Malaya plant and its assets was further reduced to around P1.85 billion from P2.01 billion, which was the minimum price offered in the second round of negotiated sale.

PSALM said that it would hold a pre-negotiation conference for the five interested buyers on March 9 to discuss issues and concerns about the terms of the sale. The deadline for offer submission is on April 23 at noon.

The Department of Energy earlier said that the mounting bill for the Malaya power plant had forced PSALM to pursue a negotiated sale for the asset, citing unsustainable maintenance costs and years of failed auctions.

In its 37th status report on the implementation of Republic Act No. 9136 or the Electric Power Industry Reform Act or 2001, the department said that it costs around P1.2 billion a year to maintain the plant. The number was based on the Malaya plant’s upkeep from 2010 to 2019.

In September, PSALM declared a failure of its third-round auction to privatize the power plant and its assets, since the two pre-qualified bidders Panasia Energy, Inc. and AC Energy Philippines did not submit a bid. The auction floor price at that time was pegged at P2.19 billion, less than half of the previous round’s P4.48-billion minimum.

PSALM had said that the Malaya plant remained operational. The power source is dispatched as a “must-run” unit, or a facility that is compelled to run and provide the needed power to ensure reliability of supply in the grid.

PSALM is privatizing energy assets to settle financial obligations assumed from the National Power Corp. — Angelica Y. Yang

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