At least five groups prequalified for Ilijan IPPA sale

The Power Sector Assets and Liabilities Management Corp. (PSALM) said that "at least five" groups have been prequalified to join the auction for the authority to manage the contracted capacity of the 1,200-megawatt Ilijan Natural Gas Combined Cycle Power Plant in Batangas. The bidding for the Ilijan Independent Power Producer Administrators (IPPA) contract has been set on April 16. PSALM said in a press release on Friday that "at least five interested parties...received their bidding packages after satisfying the preliminary requirements for the bidding process." The preliminary requirements include the submission of a letter of interest, execution of a confidentiality agreement and undertaking with PSALM, and payment of a $10,000 participation fee. "The [prospective] investors are currently undertaking their respective due diligence," PSALM said in its statement. PSALM is the government body formed and mandated by Republic Act 9136, or the Electric Power Industry Reform Act (EPIRA) of 2001, to manage the privatization of state power assets, as well as to handle the liabilities of the National Power Corp. (Napocor). Conrad S. Tolentino, PSALM vice-president for asset management and electricity trading, declined to give details on the prequalified groups. PSALM said it met representatives of the interested groups in a pre-bid conference last Thursday to discuss bidding procedures. PSALM added that another forum has been set on Feb. 24 to discuss the financial aspect of the auction. Companies which have publicly stated that they are interested in bidding for the Ilijan IPPA contract are listed firms Pacifica Inc., First Gen Corp., Aboitiz Power Corp., San Miguel Corp., and Trans-Asia Oil and Energy Corp. Privatizing at least 70% of the IPPA contracts of the National Power Corp. (Napocor) is one of the preconditions to usher in "open access" -- by which electricity users are supposed to be able to choose among several power producers for their supply -- and retail competition in the power industry as stated under EPIRA. PSALM has achieved 44% of this target after completing the sale of the hydro IPPAs last December. Mr. Tolentino said that the sale of the Ilijan IPPA contract would push the privatization level to 68%. The sale of the IPPA contract for the Unified Leyte plants will add 10% to the privatization level and enable the government to breach the 70% threshold. PSALM has set the bidding for the IPPA contract of the Unified Leyte plants this year but has yet to announce a specific date. The IPPA contract owners administer the trading of the power produced by the power plants in the Wholesale Electricity Spot Market. IPPA contract owners are also responsible for procuring coal and other fuel requirements for the power plants. The IPPA contract owners assume ownership of these plants after the completion of their build-operate-transfer contracts. PSALM had already breached the 70% threshold for privatization of the state’s generating assets, another precondition for open access, last July after the successful sale of the 600-MW Calaca coal fired plant to DMCI Holdings, Inc. -- JBFS, BusinessWorld