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THE privatization of the Calaca coal-fired power plant is reportedly
imperiled by the reluctance of state-owned National Power Corp. to
repair the facility.
The 600-megawatt coal-fired power plant was
auctioned off by the Power Sector Assets and Liabilities Management
Corp. (PSALM) to French-Belgian firm Suez Energy International in
October last year for $786.53 million.
Suez Energy earlier indicated its plans to close
the transaction two months ahead of schedule this June. But
according to a highly placed source, negotiations failed to push
through because both of Calaca’s generating units have been shut
down.
The source said the facility cannot be turned
over to the buyer because this was not the “operating condition”
of Calaca under its Asset Purchase Agreement.
Napocor reportedly asked PSALM, which is tasked
to privatize its power plants, that it needs to advance $600,000 if
repairs are to be done on Calaca, the second coal plant to be
privatized by the government after the 660-megawatt Masinloc plant.
However, Napocor has yet to push through with
the bidding and other requirements for the facility’s repair so
that PSALM can finalize the closing date for the Calaca transaction
with Suez Energy.
Sources said the parties have tentatively agreed
on an internal deadline for financial closing on July 15, setting
allowance for the agreed repair of the plant’s generating units.
Suez Energy indicated early on that it will work
on a full payment for the Calaca transaction.
The plant was first offered to prospective
investors in June 2005, but the auction was canceled after two of
the three qualified bidders backed out shortly before the deadline
for submission of offers.
The second round of bidding, which was held on
27 April 2006, was also declared a failure because only one bidder
made it to the designated venue within the deadline. The subsequent
process of open reverse auction likewise failed because the price
proposals submitted by the two bidders were below the reserve price.
-- Euan Paulo C. Añonuevo
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