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The National Power Corp. (Napocor) may consider raising the level of transition supply contract (TSC) to be attached to the 600-megawatt Masinloc coal-fired power plant which is up for sale in July.
“We are open to increasing it. We will study it. Whatever they (Power Sector Assets and Liabilities Management Corp.) want, we will follow,” Napocor president Cyril del Callar said.
But Del Callar said they are still waiting for the formal reply of PSALM, the state-run agency handling the privatization of Napocor’s assets, on their proposal to allocate a TSC of only 25 percent to the Masinloc power plant.
“We still have not received their response to our proposal,” he said.
However, PSALM president Jose Ibazeta had already said they would convince Napocor to increase the TSC allocation of Masinloc to at least 50 percent of its dependable capacity.
Ibazeta reasoned that a higher TSC would encourage more bidders to the upcoming privatization of Masinloc on July 26 this year.
According to Ibazeta, as much as possible they would want a higher TSC than what was being offered by Napocor at 25 percent of the 550-MW dependable capacity of the Masinloc plant.
“We’re still negotiating with Napocor. We want it higher. The TSC adds a certain value but you also have to look at other factors like the condition of the plant,” Ibazeta said.
The attachment of a TSC is crucial as it assures the winning bidder a ready market for the plant’s output.
About 22 investor groups have earlier expressed interest in the bidding for the Masinloc facility during a pre-bid conference held this month.
Based on the result of the pre-bid conference, PSALM noted that most of the prospective bidders are expecting a higher TSC for Masinloc.
Of the interested bidders, 15 are foreign companies and seven are local firms. The 15 foreign entities are from the Asia-Pacific region,
Among the interested parties include China Light and Power, First Gen Corp., Ranhill Berhad of
Ibazeta said the bidders will likely consolidate to groups of six to seven serious investors during the bidding proper.
PSALM anticipates a more expeditious sale process for the Masinloc plant after it obtained the specific consents of Napocor’s major creditors — the Asian Development Bank, the Japan Bank for International Cooperation and the World Bank — for the sale of the power facility.
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