PSALM defends Angat privatization

The Power Sector Assets and Liabilities Management Corp. (PSALM) has said that the privatization of the 218 megawatt (MW) Angat hydroelectric power plant (HEPP) is above board, following criticism that the sale was not in the public interest. "There is nothing controversial, illegal, or covert in the privatization" of the Angat power plant, PSALM said in a statement Friday. On Wednesday, PSALM announced that state-owned firm Korea Water Resources Corp.’s (K-Water) had made the highest offer for the facility with a $441 million bid. PSALM said it will declare K-Water the winner after it verifies the company’s documentary requirements. PSALM said on Friday that the privatization of the Angat power plant "stringently followed the provisions of the law, specifically the Electric Power Industry Reform Act (EPIRA), and was conducted in a transparent and objective manner." In a statement released on Friday, the Freedom from Debt Coalition (FDC) said the privatization of the Angat was a "midnight sale" transaction. "There is a significant level of public interest involved in the sale of the Angat HEPP, and the said sale requires due consideration of both the public and our public officials. Proceeding with the sale in the middle of the election period, and in the last two months of an outgoing administration, is bad timing, to say the least," Dianne Roa, FDC’s water advocacy coordinator, said in a statement. "It certainly doesn’t look or smell right," she said. FDC said that the government should not proceed with the awarding of the contract to K-Water. PSALM reacted by saying that the Angat power plant privatization was not done covertly. "PSALM was never remiss with its obligations to properly inform its stakeholders, including various interest groups and the general public, of its power privatization activities. And it has done so transparently and objectively, not covertly," the company said. Located in San Lorenzo, Norzagaray in Bulacan, the Angat power plant consists of four main units, each with a capacity of 50 MW. The units were commissioned in 1967 and 1968. To augment its operation, the plant uses five auxiliary units including two turbines capable of generating a total of 28 MW. These turbines are owned by the Metropolitan Waterworks and Sewerage System and were not part of the bidding. With the sale of the Angat power plant, PSALM’s privatization level has hit the 87.82% mark for all its generation assets in the Luzon and Visayas grids. Privatizing 70% of the generating assets and the contracted capacities of Napocor to independent power producers is one of the preconditions to usher in open access and retail competition in the power industry under Republic Act 9136, or the Electric Power Industry Reform Act of 2001. PSALM is the government body created and mandated by EPIRA to manage the privatization of the state’s power assets as well as to handle the liabilities of Napocor. - BusinessWorld