Korean firm bags Angat power plant

MANILA, Philippines - A new player in the Philippine power sector, Korea Water Resources Development Corp. (K-Water), offered yesterday the highest bid for the 218-megawatt Angat Hydroelectric Power Plant (HEPP) in Bulacan, the Power Sector Assets and Liabilities Management Corp. (PSALM) said. PSALM, the entity that handles the privatization of the National Power Corp. (Napocor) assets and contracts, said K-Water offered $440.88 million for the Angat power facility to edge out five other bidders.

The other bidders were DMCI Power Corp. ($188.89 million), First Gen Northern Energy Corp. ($365 million), San Miguel Corp. ($312.50 million), SN-Aboitiz Power Pangasinan Inc. ($256 million) and Trans-Asia Oil & Energy Development Corp. ($237 million).

PSALM noted that K-Water’s bid exceeded the reserve price set by the state agency for the Angat HEPP.

K-Water significantly contributes to the development of South Korea’s heavy and chemical industries and the modernization of the national industrial structure in accordance with the Korean government’s national development plan. It substantially contributed to the growth of the Korean economy and the improvement of the public welfare by implementing water resources development projects and managing these resources.

The Korean firm completed the Soyanggang dam project and started the Seobingo and Gumi industrial complex projects.

PSALM said it will verify the accuracy, authenticity and completeness of the bid documents K-Water had submitted before the company can be formally declared the winning bidder for the Angat HEPP. As soon as K-Water is officially declared the winning bidder, it will be obligated to operate and maintain the Angat Dam at no cost to the government.

Operation and maintenance obligations include keeping the dam compliant with international standards on safety, as well as addressing all structural weaknesses of the dam.

In successfully bidding out the Angat HEPP, which operates through the Angat Dam, PSALM stressed that only the power plant component of the dam was privatized.

PSALM stressed that despite the privatization of the Angat Dam, which supplies more than 90 percent of the water requirements of Metro Manila and neighboring provinces, it will remain the property of the Philippine government.

The state-run asset management firm also pointed out that there is no correlation between the privatization of the power plant and the water supply from the Angat reservoir.

PSALM said the use of water by the winning bidder for the Angat HEPP will still be regulated by the National Water Resources Board.

“This addresses any misapprehension that the control over the use of the water from the dam will be left to the discretion of a private entity,” PSALM said.

PSALM said the new owner of the Angat HEPP can only use the same water that is already allocated to the Metropolitan Waterworks and Sewerage System (MWSS) for domestic use and the National Irrigation Administration for irrigation purposes.

 PSALM also cited the Water Code which stipulates that “in times of emergency the use of water for domestic and municipal purposes shall have a better right over all other uses.”

Located in San Lorenzo, Norzagaray in Bulacan, the Angat HEPP consists of four main units, each with a 50-MW capacity. The units were commissioned between 1967 and 1968.

To augment its operation, the plant uses five auxiliary units including two turbines capable of generating a total of 28 MW. These turbines are owned by the MWSS and were not part of the bidding.

With the successful privatization of the Angat HEPP, PSALM’s privatization level has hit the 87.82 percent mark for all its generation assets in the Luzon and Visayas grids.