By Myrna M. Velasco
For yet another round, state-run Power Sector Assets and Liabilities Management Corporation (PSALM) is re-scheduling to June 30 this year the sale auction for the 650-megawatt Malaya thermal power facility and its underlying plant site in Pililla, Rizal.
In an advisory to the media, the government-owned company stated that the deferment of the bidding is due to the extended enhanced community quarantine (ECQ) in Luzon because of the coronavirus health emergency.
As previously targeted, the bidding for the facility’s divestment should have been April 30; then re-scheduled to May 19; and for the third time, it was moved again to June 30 this year at 12:00 noon.
Relative to the new tendering schedule, PSALM advised interested parties that “the new deadline for the filing of a request to bid as a consortium is on May 11, 2020.”
Correspondingly, the release of Asset Purchase Agreement (APA) to qualified bidders, is slated on June 16, 2020 or “not later than seven days prior to the bid submission deadline.”
Under the Duterte administration, the Malaya plant is the single biggest asset that had been recurrently placed on the auction block – with PSALM still not finding its luck on prospective buyer that could bring it the right check.
In last year’s bidding, the highest tender it cornered was ₱1.0 billion from interested construction firm-buyer D.M. Wenceslao and Associates Inc.; but even PSALM’s attempt then for a negotiated deal with the company fell through because the offer was below the prescribed reserve price of ₱4.481 billion.
PSALM reiterated it will disclose the mini¬mum bid price to qualified bidders “immediately after securing the board’s decision on the matter.” The board of directors of PSALM is chaired by Finance Secretary Carlos Dominguez III.
The asset-seller firm further indicated that its 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.”
The Malaya plant was being called upon as “must run unit” (MRU) for Luzon grid during tight supply conditions; but with the Department of Energy (DOE) stating that the facility is no longer needed for this function, the next prudent step for the government will be to enforce its privatization.
The interested investors eyeing the asset have been seeing more value in the plant site, with some of them indicating that this could be turned into a real estate development or it could be aligned as a host-site for either solar or gas-fired power installations.