PSALM opens bidding for Malaya power plant

The Power Sector Assets and Liabilities Management Corp. (PSALM) has put on the auction block the state’s power supply deal with the 650-megawatt (MW) Malaya Thermal Power Plant in Pililia, Rizal. In the invitation to bid released on Wednesday for the independent power producer administrator contract of the Malaya plant, the PSALM set an April 21 deadline for the submission of letters of interest. The agency set the deadline for execution of confidentiality agreements as well as the payment of the non-refundable fee of $5,000 on April 28. The Malaya plant supplies electricity to Bulacan, Rizal and Laguna. The bidding package, which includes the bid procedures, will be issued to participating companies from April 26 to 30. The due diligence period started on Wednesday. The pre-bid conference is on May 12, and the bid submission deadline is on June 16. As in previous bids, the PSALM will adopt the two-envelope bidding system. The first envelope, which contains the technical qualifications, will be opened, followed by the second, which contains the financial bid. Interested parties will must post a bid security of $10 million through an irrevocable letter of credit to participate in the bidding. Kepco Philippines Corp. operates the Malaya plant under a contract it won in June 1995 for the rehabilitation, operation, maintenance, and management of the thermal facility. It rehabilitated the plant within 10 months and regained 220 MW to bring back the plant’s rated capacity of 650 MW. The PSALM breached the 70 percent threshold for privatization of the state’s generating capacities — a condition for open access and retail competition in the power industry under the law deregulating the power industry in 2001 — last July after selling the 600-MW Calaca coal-fired plant to DMCI Holdings, Inc. The privatization of the Napocor’s independent power producer administrator contracts, another condition for open access, has reached 44 percent following the sale of the hydropower deals last December. The 70 percent privatization target will be breached after the sale of the Ilijan and Malaya or Unified Leyte contracts. The Ilijan bidding is on April 16. — Jose Bimbo F. Santos, BusinessWorld