In its request, PSALM invited local and foreign coal suppliers to submit proposals for the supply and delivery of 48,000 metric tons of imported steaming coal to the Naga power plant complex.
The steaming coal supply, according to PSALM, will cover the complex’s requirement for the fourth quarter of the year.
PSALM said it has approved a budget of $7.87 million for the said contract.
PSALM added that selection of the successful offer will be done through a direct negotiation procedure as specified in the implementing rules and regulations of the Government Procurement Reform Act.
PSALM said foreign suppliers to participate are required to submit a certification from the foreign suppliers’ country of origin that its laws or regulations grant similar rights and privileges to citizen of the Philippines.
PSALM said proposals must be delivered to its head office in Makati at 10 a.m. and that opening of proposal will start at 10:15 a.m., Wednesday.
The Naga Complex consists of the 106.8-megawatt (MW) Naga Coal Thermal Power Plants 1 and 2 and the 39-MW Naga Diesel Power Plant located in Naga, Cebu. The plants are under a Rehabilitate-Operate-Maintain-and-Manage Agreement/Energy Conversion Agreement with KEPCO Salcon Philippines Corp., which is set to expire in March next year.
PSALM earlier decided to defer the supposed privatization of the said power plant on Oct. 10.
Emmanuel Ledesma Jr., PSALM president and chief executive, said the PSALM Board decided to grant the request of the Joint Congressional Power Commission (JCPC) to conduct further review the allegedly unfair and illegal condition known as a “right to top” the highest bid previously granted to SPC Power Corp. (SPC) in the land lease Agreement executed by and among PSALM, National Power Corp. and SPC in 2009.
PSALM received said letter request from the JCPC on Monday through Sen. Sergio Osmeña III, Rep. Henedina Abad and Rep. Lorenzo Tañada III.
PSALM recalled that the land lease agreement was executed by and among the parties pursuant to the Asset Purchase Agreement on the Naga Land-based Gas Turbine (LBGT) Plant acquired by SPC through public bidding in 2009.
In the agreement, PSALM said SPC was granted the right to top the highest bid on the sale or lease of the properties within the vicinity of the LBGT Plant in order to give the winning bidder of the LBGT Plant the opportunity to expand, subject to the payment of a premium of 5 percent over the highest bid on said adjacent properties.
PSALM said the Naga Complex is located in the vicinity of the LBGT plant.
“The Invitation to Bid on the Naga Complex published in July 2011 generated interest of 10 bidders, which was eventually reduced to five as the participants were required to comply with certain bid requirements,” Ledesma said.
He added it was apparent that despite the disclosure made to the bidders of the existence of said right to top in favor of SPC, the bidding exercise still resulted in continued interest from existing bidders to win the Naga Complex.
Ledesma said PSALM was able to structure the sale of the capacity and the assets of the complex in such a way that PSALM will still be able to secure the most optimal value for the asset despite the existence of said right to top.
Ledesma said despite of the interest generated the PSALM board deemed it prudent to defer the bidding and to address all concerns in the interest of transparency and propriety.
In July this year, PSALM commenced the new round of bidding for the appointment of an Independent Power Producer Administrator to manage the contracted capacity of the Naga Complex in line with its continued efforts to implement its mandate under the Electric Power Industry Reform Act.
