PSALM embarks on 2nd bidding for Malaya TPP

MANILA, Philippines — State-run Power Sector Assets and Liabilities Management Corp. (PSALM) has started the second round of bidding for the 650-megawatt (MW) Malaya Thermal Power Plant (TPP) in Rizal.

PSALM published an invitation to bid for the second round of privatization of the Malaya TPP.

Interested parties are given a period of over one month, or from Oct. 7 to Nov. 20 to conduct their due diligence on the government-owned power plant.

To participate in the auction, interested parties are also required to submit letters of interest (LOIs) until Nov. 6.

“Only interested parties that submit an LOI by the submission deadline shall be allowed to participate in the privatization activities of the purchased asset,” PSALM said.

The state-run firm has set a pre-bid conference on Oct. 24 and a bid submission deadline on Nov. 22.

Last month, PSALM declared a failed bidding for the sale of the Malaya TPP after only one bidder submitted an offer.

Out of the four qualified bidders, only AC Energy Inc. submitted a bid for the government asset. The other qualified bidders were FGEN Reliable Energy Holdings Inc., D.M. Wenceslao & Associates Inc., and DMCI Power Corp.

“While it is unfortunate that the bidding failed, PSALM remains very much committed to privatize the Malaya Power Plant this year. Failure of the first round of bidding will not deter us from trying again and again, until we are able to successfully dispose of this asset,” PSALM president and CEO Irene Joy Besido-Garcia said.

The Malaya TPP was originally scheduled for privatization in March 2017, but was deferred several times after the Department of Energy (DOE) proposed to convert it into a liquefied natural gas (LNG) plant.

The plant, which runs on diesel, was designated as a must-run unit (MRU) to address supply deficiency when operating power plants in the grid suddenly bog down or become unavailable.

It will operate as an MRU until the DOE finalizes its privatization schedule.

After changing the terms of reference, PSALM then set the sale of the power asset in December 2018, but the PSALM board decided to push back the privatization anew since there was no basis for a base price yet.

PSALM engaged PricewaterhouseCoopers (PwC) Philippines to do the valuation of the Malaya TPP and its underlying land after two failed public biddings and four failed negotiated procurements.

Located in Pililia, Rizal, the plant consists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler.

It was last rehabilitated in 1995 by the Korea Electric Power Corp. under a 15-year rehabilitate-operate-manage-maintain agreement with the government.