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Four firms interested in bid for Unified Leyte plants, Philippines

Tongonan, Leyte Geothermal power plant, Philippines
Alexander Richter 30 May 2010

There are four companies that have signaled interest in bidding for the right to manage the Philippines' government power supply contract with the Unified Leyte geothermal power plants.

Reported from the Philippines, “Four companies have signified interest in bidding for the right to manage the government’s power supply contract with the Unified Leyte geothermal power plants.

In a statement, the Power Sector Assets and Liabilities Management Corp. (PSALM) said four investor groups have submitted letters of interest for the independent power producer administrator (IPPA) contract covering the 640-megawatt facility.

“The interested parties, which have completed the initial requirements for the bid exercise, are now ready to conduct their due diligence on the Unified Leyte [plants] located in Tongonan, Leyte Province,” the state agency said.

PSALM did not disclose the names of the companies that sent letters of interest. Earlier, Pacifica, Inc. and Aboitiz Energy Corp. expressed interest in bidding for IPPA contract in separate disclosures to the stock exchange.

Before bidding, interested companies must submit confidentiality agreements and a nonrefundable fee of $5,000 by May 27. Bidding packages will be issued from June 4 to 11.

Bidders must attend a pre-bid conference on June 16. Bid submission will be on July 30.

Lopez-led First Gen Corp., through subsidiary Energy Development Corp., holds the operating contract for the Unified Leyte plants. This contract will expire on 2026.

IPPA contract owners have the authority to administer the trading of power produced by their plants at the Wholesale Electricity Spot Market. They are also responsible for buying coal and other fuel requirements.

They will assume ownership after the completion of build-operate-transfer agreements.

Privatizing at least 70% of the National Power Corp.’s (Napocor) IPPA contracts is one of the conditions to usher in open access and retail competition in the power industry under Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001. The IPPA privatization level is at 68%.

PSALM breached the 70% threshold for privatization of the state’s generating assets, another precondition for open access, in July 2009 after the successful sale of the 600-MW Calaca coal-fired plant to DMCI Holdings, Inc. The privatization level of generating assets has reached 91.73%.

PSALM is the government body mandated by law to manage the privatization of the state’s power assets as well as to handle the liabilities of Napocor.”

Source: BusinessWorld Online