THE second auction for the 650-megawatt (MW) Malaya Thermal Power Plant and its underlying land failed anew after none of the interested entities met the minimum bid price, according to the Power Sector Assets and Liabilities Management Corp. (Psalm).
In a statement on Friday, the state-run corporation said only DM Wenceslao and Associates Inc. submitted a sealed bid during the second round of bidding for the Malaya thermal facility and its underlying property.
Four companies, namely Panasia Energy Inc., AC Energy Philippines Inc., Fort Pilar Energy Inc., and DM Wenceslao passed the initial stage of the bidding.
However, Fort Pilar Energy, Panasia Energy and AC Energy Philippines sent Psalm a letter stating they cannot meet the minimum bid price of P4.481 million right before the deadline for the submission of the financial bid.
Psalm then proceeded with the negotiated sale with the lone bidder but the proposal was also below the minimum price, prompting the state-led firm to declare a failure of the negotiated sale process as well.
The outcome of last week’s bidding will be reported to Psalm’s board of directors in a move to lower the minimum bid price. “The next round of bidding for the Malaya plant will commence at the soonest possible time,” it added.
Currently, the Malaya plant is being dispatched as a must run unit (MRU) by the Department of Energy (DoE).
However, the power facility is no longer required to run as an MRU once privatized.
Korean firm Soosan ENS Co. Ltd. bagged the one-year service contract for the operation and maintenance of the thermal plant in January this year following its P205.7-million offer.
Under Republic Act 9136 or “Electric Power Industry Reform Act of 2001,” Psalm is mandated by law to sell the remaining assets and settle the financial obligations of National Power Corp.
It has been selling land and power assets to significantly reduce its financial obligations until its corporate life ends in 2026.
As of end-June, Psalm’s outstanding financial obligations stood at P428.9 billion, significantly lower than the 2003 level of P1.24 trillion.