By Myrna M. Velasco
State-run Power Sector Assets and Liabilities Management Corporation (PSALM) is counting on the interest of three prospective bidders on its target to eventually divest the 650-megawatt Malaya thermal power facility.
The interested investors are AC Energy, Inc. of the Ayala group; Panasia Energy, Inc. and Denki Power, which all manifested to PSALM their intent to join the April 15, 2020 bidding. The asset-seller form held its pre-bid conference last February 13 so the bidders would have a venue to raise questions relating to the privatization package of the Malaya plant.
The facility’s privatization will include its underlying site – and to most prospective bidders, it is actually the real property portion that has better value to them.
Interested parties have indicated that the land could be aligned as prospective site for another power project, primarily for ground-mounted utility scale solar installations.
But for the plant, some of the previous bidders have opined that its value is almost of “scrap worth,” hence, they have been crunching their numbers leaning more on what the site of the facility could offer.
That prompted them to render that the previous ₱4.481-billion reserve price cast for the asset had been way relatively inflated.
The Malaya thermal power plant is currently being operated as a “must-run unit” (MRU) or the plant that Luzon grid has been depending on for additional capacity when there is supply tightness.
After the plant’s privatization, the Department of Energy (DOE) set out previous pronouncements that the asset will no longer be called upon by system operator National Grid Corporation of the Philippines as MRU; and its use shall be left to the discretion of the buyer.
PSALM itself has noted that the operations of the plant has been incurring losses for the company through the years, thus, the best recourse for the government is to already have it divested.
By far, the Malaya plant is the asset that is being placed in the auction block recurrently by PSALM as it still studies privatization option for the other facilities that are still under its charge.
The government-run firm previously hinted that its next divestment targets will be for the Casecnan and Caliraya-Botocan-Kalayaan (CBK) hydropower plants – to be underpinned by a study commissioned with the Asian Development Bank.
PSALM has six more years of remaining corporate life – and within that span, it is eyeing to fully privatize the power facilities previously owned by the National Power Corporation, along with array of real property assets.