PUBLICLY listed SPC Power Corp. on Wednesday urged the Power Sector Assets and Liabilities Management Corp. (PSALM) to seek a motion for reconsideration before the Supreme Court (SC), after the court reinstated the notice of award of a power plant to another power firm.
“We urge PSALM, chaired by the finance department, to file its own motion for reconsideration, as clearly, the decision is disadvantageous to the government at a time when the government needs much-needed funds for employment and other basic services,” SPC said on Wednesday.
This, even as SPC is preparing its motion for reconsideration to the High Tribunal, reiterating its earlier position that the recent decision “destabilizes the investment climate in the Philippines and retroactively changes the rules on competitive bidding.”
“With the Supreme Court’s ruling to reinstate the notice of award to Therma Power Visayas Inc. [TPVI], the government not only stands to lose P54 million, but is deprived of a rebid of the Naga Power plant, which would likely result in an even higher price for the government,” SPC said.
TVI is a unit of Aboitiz Power Corp. Both power firms, SPC and Aboitiz, are based in Cebu.
On October 5 the SC upheld the validity of the public bidding held by PSALM of the Naga Power Plant, but invalidated the condition in the bidding granting SPC the right to top the bid.
It ordered the reinstatement of the Notice of Award issued by PSALM dated April 30, 2014, awarding the 153.1-megawatt (MW) Naga Power Plant Complex (NPPC) in Cebu to TPVI. The SC also annulled and set aside the Asset Purchase Agreement (NPPC–APA) and the Land Lease Agreement executed (NPPC–LLA) between SPC and PSALM, and directed PSALM to execute the NPPC-APA and the NPPC-LLA in favor of TPVI.
PSALM declared TPVI the highest bidder for the NPPC, with a bid of P1.088 billion, higher than SPC’s bid of only P858,999,888.88.
SPC said the October 2016 ruling of the SC was “grossly disadvantageous to the government.”
The move followed the previous ruling of the SC, which declared as null and void SPC’s right to top the bid of TPVI by 5 percent.
SPC Power said the High Court’s decision to reinstate the award of the Naga facility to TVPI is contrary to its earlier position that “public bidding is the better means to secure the best bid for the government.”
In its decision dated September 28, 2015, the SC stated “attracting as many bidders to participate in bidding for public assets is still the better means to secure the best bid for the government and achieve the objective under Epira [Electric Power Industry Reform Act] to privatize NPC [National Power Corp.] assets in the most optimal manner.”
TPVI offered a bid of P1.088 billion during the bidding of the PSALM in March 2014, when the right to top was known to the bidders.
SPC exercised its right to top and matched TPVI’s bid and paid an additional P54 million, or a total of P1.143 billion, to PSALM. Eventually, the Naga facility was awarded and turned over to SPC in September 2014. In June 2014 Sergio Osmeña III filed a case against SPC and TVPI with the SC, questioning the validity of the right to top, arguing it is noncompetitive.