Despite legal issues, PSALM awards Cebu power plant to SPC

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM), the government agency tasked to privatize state-owned power assets, has awarded to SPC Power Corp. the Naga complex in Cebu despite legal issues surrounding the sale.

“The board decided to issue the notice of award. This was received by SPC,” said PSALM president Emmanuel Ledesma in a text message.

PSALM in April awarded the facility to the Aboitiz Group’s Therma Power Visayas Inc. (TPVI) but SPC, which has a land lease agreement with the government for the Naga facility until 2020, decided to exercise its right to top by paying P1.143 billion for the plant complex.

Ledesma said the board approved a 25-year lease over the land containing the Naga complex.

In July last year, a sole bidder submitted pre-bid documentary requirements while the second round of bidding held in November also failed because only bidder submitted a bid.

Last year, four groups expressed interest in the Naga power plant. These are DMCI Holdings Inc., the Aboitiz Group, D.M. Wenceslao and SPC but the privatization also did not materialize.

Located in Colon, Naga City, the power plant consists of two thermal power plants and one diesel-fired power plant that use a combination of coal, bunker oil and diesel as fuel.

These plants are the 52.5-megawatt Cebu 1 and 56.8-MW Cebu 2 coal-fired thermal power plants, and the 43.8-MW Cebu diesel power plant composed of six 7.3-MW bunker oil power units.

PSALM’s privatization proceeds from the sale of generating assets, decommissioned plants, transmission assets and appointment of independent power producer administrators have reached $10.210 billion as of end-2011.