STATE-OWNED Power Sector Assets and Liabilities Management Corp. (PSALM) has reduced the floor price for the Malaya Thermal Power Plant to P2 billion, as it seeks a negotiated sale for the property after another failed bidding last month.
In a notice published in a newspaper on Monday, PSALM invited interested groups to submit offers for the privatization of the 650-megawatt power facility and its underlying land in Pililla, Rizal.
PSALM set a new minimum bid price of P2.007 billion for the asset, P180 million or 8% lower than the previous price of P2.188 billion.
The company, which was formed by law to privatize state-owned energy assets, is accepting letters of interest from prospective buyers until Oct. 22, a day before the pre-negotiation conference. The deadline for the submission of offers is set on Nov. 16.
Last month, PSALM declared another failed public auction after pre-qualified bidders — Panasia Energy, Inc. and Ayala-led AC Energy Philippines, Inc. — said they could not meet the floor price which was set at P2.188 billion. The said floor price was already 51% lower than the minimum bid price of P4.48 billion during the previous failed bidding in 2019.
“The PSALM Board already rationalized and lowered the minimum bid price of Malaya in the hope that the bidders would be encouraged to submit their bids. It is regrettable that despite the reduced minimum price, still, no bidder submitted a bid,” PSALM President Irene B. Garcia said in a previous statement.
After the failed bidding last year, PSALM also conducted negotiations to sell the asset to D.M. Wenceslao and Associates, Inc. However, the deal fell through as its offer was below the floor price.
The government first announced its plan to privatize the Malaya Thermal Power Plant in 2016.
Four bidders — APT Global, Inc., Phinma Energy Corp., Riverbend Consolidated Mining Corp., and AC Energy Holdings, Inc. — had manifested an interest to join its auction, which was set in March 2017. However, the Department of Energy postponed that round because it wanted to require the potential buyers to convert the facility into a liquified natural gas plant.
According to PSALM, the Malaya plant continues to incur losses. Between 2010 and 2019, it cost P1.21 billion to maintain the facility.
The two-unit thermal plant was commissioned in the 1970s. It was rehabilitated in 1995 by Korea Electric Power Corp. under a 15-year rehabilitate-operate-manage-maintain deal.
The power generator was designated as a must-run unit that will deliver power to the Luzon grid during tight supply situations.
Aside from the Malaya plant, PSALM is still maintaining the 1,650-MW Agus-Pulangi hydropower complex in Mindanao which will undergo rehabilitation next year. — Adam J. Ang