Mothballed power plant in Cebu draws interest

MANILA, Philippines - Four interested parties attended the pre-bidding conference Thursday for the decommissioned 54-megawatt Cebu Diesel Power Plant II. In a statement, the Power Sector Assets and Liabilities Management Corp. (PSALM) said the four Filipino investor groups submitted all the preparatory requirements for the Cebu II power plant auction. Two of the four parties are participating in PSALM’s bidding exercises for the first time, the statement read. The statement quoted PSALM spokesman Conrad S. Tolentino as saying that the sale of the plant should help PSALM pay for its debts and other obligations, but will not add to the privatization level of power assets the government is targetting to usher in retail competition in an "open access" environment. That regime, mandated by Republic Act 9136 or the Electric Power Industry Reform Act of 2001, will enable electricity consumers to choose their suppliers. The regime is designed to provide electricity efficiently at market-driven prices. Mr. Tolentino said the plants can be rehabilitated and revived, or be totally demolished. The interested parties are conducting due diligence until January 19 next year, in time for the auction scheduled on January 21. The Cebu plant consists of three generating units which were commissioned between May 1982 and April 1983. Originally designed to operate as a base-load plant, the Cebu II facility underwent preservation procedures in December 1997. It is located in the municipality of Talavera in Toledo, Cebu. PSALM said it is selling only the "structures, plant equipment, auxiliaries and accessories." PSALM sold its first decommissioned power asset early this year after concluding the negotiated sale of the Manila Thermal Power Plant for $2.5 million with Gagasan Steel Inc. on May 15. — A. K. K. Austria, BusinessWorld