Auction of decommissioned plant set for December 19

REPORT FROM BUSINESSWORLD THE POWER Sector Assets and Liabilities Management Corp. (PSALM) has set the auction of the decommissioned Manila Thermal Power Plant for Dec. 19. State privatization agency PSALM on Wednesday published an invitation to bid for the plant in local newspapers, saying that it would be sold on an "as is, where is" basis. The package includes plant equipment, accessories and the land as well. By including the two-hectare property, PSALM said it hopes to attract more investors to the Manila thermal plant auction. The plant is in a prime commercial area, PSALM emphasized in a statement. PSALM added that "the size of the land is ideal for industrial purposes," and since the plant is already retired, it expects bidders to convert it to a construction or steel manufacturing area. Others may also be interested in the Manila thermal plant’s equipment, component auxiliaries and accessories, it said. The first two auctions for the Manila thermal plant — held in the first quarter of 2005 and the last quarter of 2006 — failed due to poor investor interest. If the December bidding fails, PSALM said it may resort to a third-party auction for the plant. Located along the Pasig River in Manila, the Manila thermal plant has two identical generating units, each with a capacity of 100 megawatts (MW). Both units substantially contributed power to the Luzon Grid until they were retired in January 2000. It is the first retired National Power Corp. (Napocor) asset that PSALM hopes to successfully sell as scrap. PSALM is accepting letters of interest (LoI) from prospective investors until next Wednesday, Oct. 10. In addition to the submission of the LoI, interested parties should sign a confidentiality agreement and pay a non-refundable fee of $500 not later than Oct. 12. The pre-bid conference is set for Oct. 24. The PSALM will be busy in the last quarter of this year. It is auctioning off the Calaca coal-fired thermal power plant this Oct. 16; the Ambuklao-Binga hydroelectric power plants on Nov. 28; as well as the Palinpinon geothermal and Panay diesel power plants on Dec. 5. At least 10 groups have expressed interest in each of the power plant packages, which PSALM has said indicates "strong investor interest" in power assets this year. — M. K. C. Conti/BusinessWorld