Gagasan Steel is new owner of Manila Thermal Power Plant

MANILA, Philippines - Gagasan Steel Inc. has received its notice of award from the Power Sector Assets and Liabilities Management Corp. (PSALM), which formally makes it the new owner of the decommissioned Manila Thermal Power Plant (MTPP). Aside from the notice of award, given last Thursday, Vice President for Asset Management and Electricity Trading Froilan A. Tampinco also gave Gagasan Steel the certificate of effectivity that obligates both PSALM and the company to execute the provisions stipulated in their asset purchase agreement. The notice of award and certificate of effectivity were issued after Gagasan Steel gave PSALM its performance bond for MTPP, which amounted to $1.253 million or half of the total purchase price of $2.5 million. The purchase price covers the plant equipment, components, auxiliaries, and accessories of the MTPP, but excluding the underlying land as Philippines law states that foreigners are not allowed to own land in the country. The asset package includes two identical coal-fired generating units with a capacity of 100 MW, both retired in 2000, and the two-hectare property it stands on. Gagasan Steel is an affiliate of Malaysia-based Gagasan Steel Sdn Berhad, an import-export handler, dealer and trader of scrap metals, which has been in operation since 2002. Its local clients include National Power Corp. and the Manila Electric Co. Under the terms of the sale, Gagasan Steel will be responsible for dismantling the plant equipment and site clean up. It is given 270 days for the actual start of the project and mobilization and six months, subject to extension, to dismantle the plant building and equipment and clean up the site. PSALM and Gagasan Steel entered into negotiated sale for the MTPP on April 25. Located at Isla de Provisor in Paco, Manila, the MTPP is the first decommissioned plant sold by PSALM on an "as is where is" basis. - Ava Kashima K. Austria, BusinessWorld