SC asked to reconsider ruling on Naga power plant complex
INVESTING ON THE GO - Carlo S. Lorenciana (The Freeman) - November 4, 2016 - 12:00am

CEBU, Philippines – SPC Power Corp. yesterday said it filed an urgent motion for reconsideration with the Supreme Court to ask the high tribunal to reconsider the decision to reinstate the award of the Naga Power Plant Complex (NPCC) to a unit of Aboitiz Power Corp.

"As of present, SPC Power Corp. is still operating the Naga Power Plant," the company said in a Philippine Stock Exchange disclosure on Thursday.

The urgent motion for reconsideration was filed on October 26, 2016.

In a ruling dated October 5, 2016, the SC ordered the reinstatement of the Notice of Award issued by the Power Sector Asset and Liabilities Management Corp. (PSALM)  dated April 30, 2014, awarding the 153.1-MW Naga Power Plant in Cebu to Aboitiz unit Therma Power Visayas Inc.

The SC ruling said that the bidding for the 153.1-megawatt power plant was valid but it invalidated the condition in the bidding granting SPC the right to top the bid.

The court also annulled and set aside the asset purchase agreement and the land lease agreement between PSALM and SPC for the said power plant.

The SC ruling also directed PSALM to execute the two agreements in favor of TPVI.

In a separate disclosure on Wednesday, Aboitiz Power said  that SPC in 2009 acquired through a negotiated bid the 55-MW Naga land-based Gas Turbine Power Plant in Colon, Naga City, Cebu.

"In the same year, it entered into a Land Lease Agreement with PSALM, which includes SPC’s right to top the price of a winning bidder for the sale of any property in the vicinity of the leased premises.

PSALM subsequently bid out the Naga Plant located in the leased premises," the listed power firm said. "On April 30, 2014 and after two failed biddings, PSALM issued a Notice of Award to TPVI for submitting the highest bid for the Naga Plant.

SPC wrote PSALM of its intent to exercise its right to top the winning bid, on the condition that the Land Lease Agreement would be for a term of 25 years from closing date.

PSALM then awarded the contract to SPC, despite TPVI’s objections that SPC did not validly exercise its right to top because of its qualified offer," Aboitiz Power further stated.

Sen. Sergio Osmena III then filed a petition with the Supreme Court seeking to enjoin PSALM from awarding the Naga Plant on the grounds that SPC’s right to top was void.

On September 28, 2015, the SC canceled the award to SPC on the finding that SPC’s right to top is void for lack of interest or right to the object over which the right to top is to be exercised. (FREEMAN)

SPC POWER CORP
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