PSALM says 11 bidders interested in 4 power barges

MANILA, Philippines - State-run Power Sector Assets and Liabilities Management Corp. (PSALM) said 11 firms have expressed interest in the bidding for four power barges, with more privatization efforts expected to follow suit within the year.

“All the big players are participating. All of the major players, most of them are listed firms,” said Emmanuel R. Ledesma Jr., president and chief executive of PSALM.

The prospective bidders consist of local and foreign companies, PSALM said. Among the top energy firms in the local bourse include Aboitiz Power Corp., Lopez-led First Gen Corp. and diversified conglomerate San Miguel Corp.

Late last month, PSALM opened the bidding process for the four power barges of the National Power Corp. (Napocor) that will augment the supply in Mindanao.

PSALM’s preliminary requirements consist of the submission of a letter of interest not later than Feb. 14, submission of a confidentiality agreement and the payment of a non-refundable participation fee of $3,000 not later than Feb. 15.

“The participants are currently conducting their due diligence audit to ensure utmost transparency in this transaction,” Ledesma said.

PSALM initially planned to auction off Power Barges 101, 102, 103 and 104 before the end of last year but was delayed due to a review.

“The barges and the way they are packaged match the strategies and priorities of the bidders,” Ledesma said.

A pre-bid conference will be held on Feb. 29 to discuss issues and concerns on the bidding procedures.

Ledesma said the floor price for the bids will be announced April 13, which is also the submission date for the bids.

Under the bidding rules for the power barges, winning bidders would have to immediately transfer these power facilities in Mindanao and would have to stay there until 2014.

The power barges are movable and can be relocated anywhere with adequate mooring structures.

Designed as base-load plants, PB 101, 102, 103 and 104 are nominal 32-megawatt (MW) barge-mounted, bunker-fired diesel generating power stations that consist of four identical Hitachi-Sulzer diesel generator units rated at eight MW each. Napocor bought the power barges from Japanese firm Hitachi Zosen Corp.

These barges were used to help ease a severe power shortage in the Philippines, providing the required support in the Visayas and Mindanao regions.

Commissioned in 1981, PB 101 and 102 are currently moored at Obrero in Iloilo City, while PB 103 and 104, which were commissioned in 1985, are moored at Botongon, Estancia in Iloilo and at the Holcim Compound in Ilang, Davao City, respectively.

Since they began operation, these barges had been moved to various locations to meet technical requirements – usually a power shortage – or to provide reactive power support to improve voltage regulation at the end of very long transmission circuits.

PSALM, formed by the 2001 Electric Power Industry Reform Act, is the state firm in charge of privatizing government power assets as well as managing Napocor’s power plants and debt. It buys the fuel requirements of the Naga power plant complex while awaiting the asset’s privatization.