Power Sector Assets and Liabilities Management Corp. plans to reduce the bid price of the 650-megawatt Malaya power plant and its underlying property in Pililla, Rizal after the second round of auction failed.
“Our next urgent step is to go back to the PSALM board to ask for the lowering of the minimum bid price and for authority to immediately commence the next round of bidding,” PSALM president Irene Garcia said.
PSALM declared a failure for the second round of bidding on Friday after three of the four interested bidders said they could not meet the minimum bid price of P4,481,796,017. The negotiated bidding with the remaining bidder also failed.
Four pre-qualified bidders passed the initial stage of the auction, including Panasia Energy Inc., AC Energy Philippines Inc., Fort Pilar Enegy Inc. and D.M. Wenceslao and Associates Inc.
Before the deadline for the submission of the financial bids at 12 noon Friday, Fort Pilar Energy, Panasia and AC Energy sent letters to PSALM stating they could not meet the minimum bid price.
The other bidder, D.M. Wenceslao, submitted a sealed bid but PSALM declared the process a failure because there was only one bid.
Pursuant to the bidding rules, PSALM then proceeded to go through the process of negotiated sale with D.M. Wenceslao. When the lone bid was opened, it still below the MBP. PSALM said it was constrained to declare a failure of the negotiated sale process.
PSALM said it would report to its board of directors the outcome of the bidding so that it could take the necessary steps to lower the MBP. The next round of bidding for the Malaya plant will commence soon, it said.
“We need to keep trying to bid out until we reach the minimum bid price that the market will find reasonable and attractive,” Garcia said.
The Malaya plant is currently operational and is being dispatched as a must-run unit. Based the Department of Energy’s direction, Malaya would no longer be required to run as an MRU once it was privatized.
PSALM manages the assets and liabilities of National Power Corp. as mandated under the Electric Power Industry Reform Act of 2001.