Operation of Limay power plant attracts little interest

MANILA, Philippines - There were only two parties that attended the pre-bid conference last Tuesday for the operation and maintenance of the 620-megawatt Limay combined cycle plant, and only one of them bought bid documents. "Only two parties attended the conference, but of the two, only one bought the bidding documents," National Power Corporation (Napocor) spokesman Dennis Gana said in a phone interview. Under the terms of the contract Napocor is auctioning off, the winning bidder will operate, maintain and repair both generating blocks of the Limay plant for one year or until the government will have auctioned off the asset. The contractor will also provide the requisite labor, supervision, spare parts, consumables and other equipment and materials for the plant. The contract costs $1 billion. Auction for the contract is on Feb. 24. Operation and maintenance of the plant was done previously by Alstom, a company engaged in providing equipment and services for power generation and rail transport worldwide. Alstom’s 15-year contract with Napocor expired last year. Commissioned in 1993, the Limay power plant consists of two 310-MW modules, Blocks A and B, both consisting of three 70-MW gas turbines and a 100-MW steam turbine, respectively. The Power Sector Assets and Liabilities Management Corp. has decided on a negotiated sale for the Limay plant on as as-is-where-is basis, but the new owner has the option to convert the facility into base-load plant by turning it into a natural-gas fired plant. To save on gas, the plant can also use the heat from exhaust gas from the gas turbines to boil water and run the steam turbines. Located in Limay, Bataan in Central Luzon, approximately 145 kilometers west of Manila, the plant is designed to meet the base-load demand of the Luzon grid. The plant has been auctioned twice, but failed to attract interest from investors. Privatizing at least 70% of Napocor’s generating assets is mandated by Republic Act 9136, or the Electric Power Industry Reform Act of 2001, in order to pave the way for a regime wherein end-users can choose to buy from private power-generating firms that can provide electricity in the most cost-efficient way. The privatization level has been thrown back to 53% after the winning bidder of the 600-Calaca coal-fired plant in Batangas backed out of the sale, noting the plant’s deterioration. — BusinessWorld