THE government’s privatization of three power barges is practically a done deal and the sale agreement may be concluded before the end of this year, a top official said.
The Power Sector Assets and Liabilities Management Corp. (PSALM) has been negotiating with the Phinma Group’s Trans-Asia Oil and Energy Corp. for the privatization of Power Barges 101, 102 and 103.
PSALM president Emmanuel Ledesma Jr. said they are almost “done with the negotiations” and only a few details of the memorandum of agreement need to be finalized.
“We are just finalizing some details regarding the memorandum of agreement with Trans-Asia Oil and Energy Development Corp.,” said Ledesma.
PSALM initiated the negotiations with Trans-Asia Oil, the power unit of the Phinma Group, after being given the green light by the Office of the Government Corporate Counsel to talk with the second highest bidder for the three power barges.
Trans-Asia offered the second highest bid for the barges with an offer of P370.52 million during a bidding conducted last year.
SPC Island Power, a unit of SPC Power Corp., was the highest bidder for PB 103 with an offer of P545.89 million. However, it decided to terminate its asset purchase agreement with the government after PB 103 suffered severe damage from Super Typhoon Yolanda (Haiyan) in 2013.
Ledesma said the agreement for the sale of the power barges is expected to be sealed within the year.
Should the cost of repair be not fully covered by the Government Service Insurance System (GSIS), Ledesma said PSALM will have a participation fee of up to a maximum of P20 million.
“Anything beyond that would be for the account of Trans-Asia,” he added.
The power barges are nominal 32-megawatt barge-mounted, bunker-fired diesel generating power stations that consist of four identical Hitachi-Sulzer diesel generator units rated at eight MW each.
PBs 101-102 are currently stationed at Barrio Obrero in Iloilo City and were commissioned in 1981. PBs 103 and 104 are moored in Botongon, Estancia, Iloilo and at the Holcim Compound, Ilang, Davao City, respectively and began operating in 1985.
The government offered the barges for sale in two packages consisting of PBs 101, 102 and 103 for the first package and PB 104 as the second package.
The bidding for PB 104 was declared a failure because the bidders, according to PSALM, did not meet the requirements.