Legal action sought on 40 MW contract on United Leyte geothermal plants, Philippines
Tongonan, Leyte Geothermal power plant, Philippines
Alexander Richter
15 Sep 2017
PHINMA Energy, formerly Trans-Asia Oil & Energy, has filed a legal action against PSALM in the Philippines on a tendered management contract for 40 MW power generation from the Unified Leyte geothermal plants, which was awarded only days after a typhoon damaged the plants.
Reported from Manila, Philippines, PHINMA Energy Corp. formally filed a case against the Power Sector Assets and Liabilities Management (PSALM) Corp. and its former president, Emmanuel Ledesma Jr. to stop it from terminating an agreement on naming independent power producer administrators (IPPAs) for the Unified Leyte Geothermal Power Plant.
The listed company told the Philippine Stock Exchange (PSE) this week it is seeking “damages with prayer for a writ of preliminary injunction/writ of preliminary mandatory injunction and temporary restraining order against PSALM and Ledesma.
The complaint against PSALM was filed at the Makati Regional Trial Court and concerns a legal evaluation of a tendered management contract for 40 MW power generation from the Unified Leyte geothermal plants, which was awarded only days after a typhoon damaged the plants.
PHINMA Energy said that should the court grant a temporary restraining order (TRO), it would stop the state-controlled corporation from terminating the agreement on grounds of administrator’s default and from asserting any additional claim to their detriment.
“In the event that the Court rules in favor of PHINMA Energy, the Agreement may be invalidated and an award for damages may be made to the Corporation. An adverse decision may open the Company to possible financial claims by PSALM,” the firm explained.
The case aims to restrain the termination of the Administration Agreement for appointing IPPAs for the 40-megawatt strips of energy from the Tonongan-based geothermal power facilities. The state-run entity names IPPAs through public bidding.
PHINMA Energy said that in numerous letters it sent to PSALM, it had formally sought to renegotiate the deal and proposed several measures for relief.
“Representatives of PSALM and PHINMA Energy met on several occasions. PHINMA Energy wrote PSALM expressing the difficulties suffered by the Administrators under the Agreement,” it said.
Through counsel, PHINMA Energy wrote a letter exercising its right to withdraw from the agreement. Discussions on the matter were initiated, but the company received a notice from PSALM of the administrator default.
PSALM then moved to end the deal and forfeit the performance bond.
PHINMA Energy (then Trans-Asia Oil and Energy Development Corp.) was awarded the right to oversee the 40-MW strips of energy from the Unified Leyte geothermal power facilities on November 7, 2013. However, Super Typhoon Yolanda (international name: Haiyan) struck Region 8 the following day, which caused severe damage to the ULGPP. A day after the typhoon, PSALM awarded the management of the energy strips to winning bidders.
Source: Manila Times
