PSALM defers sale of Casecnan hydro facility

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has moved to May 16 this year the sale of the 165-megawatt Casecnan hydropower facility instead of March 28.

According to PSALM President Dennis Edward A. Dela Serna, the asset-seller firm has yet to finalize the Water Protocol as well as the Operation and Maintenance (O&M) agreement with the National Irrigation Administration (NIA), a co-owner entity for the Casecnan facility.

At pre-qualification process, the company chief executive similarly revealed that at least seven parties are still on the roll of prospective bidders – Fresh River Lakes Corporation of First Gen; Neptune Hydro Inc. of SN Aboitiz Power; Global Hydro Power Corporation of Global Business Power Corp/Manila Electric Company; EEI Power Corporation of the Yuchengco group in consortium with South Korean firm Soosan ENS Co. Ltd, Soosan Industries Co. Ltd. and Mapalad Power Corporation; GigaAce 11 Inc. of ACEN Corp; and Belgrove Power Corporation of the Romero group.

The original 14 interested firms have been cut by half as some opted to pull out, while the rest were not able to comply with required documents.

“The rest either withdrew, or were found non-compliant with documentary requirements or did not submit deliverables,” the PSALM official noted.

Prior to the re-scheduled auction date, Dela Serna indicated that “as part of the process, we will disclose the minimum bid price to all investors.”

He, nevertheless, told reporters that the figure is not available yet and this is still being firmed up at the level of the PSALM management and its board of directors before divulging it to the qualified bidders.

On the scale of privatization proceeds to be fetched from the asset divestment, Dela Serna emphasized that the company will share 40-percent of the revenues to NIA, being the other owner of the property.

Based on the bidding terms of reference (TOR) for the Casecnan plant and following the submission of tenders in May, a seven-day post qualification process shall be carried out on the offer of the highest-ranking bidder.

Following that, a “notice of award” shall be served to the winning bidder – which shall fall on the 30th day from the declaration of the highest qualified bid.

The succeeding process is for the plant buyer to comply with all the requirements enforced by PSALM – based on the TOR of the asset’s divestment; including submission to the Philippine Competition Commission (PCC) of a request for issuance of letter of non-coverage that will also integrate the buyer’s and seller’s relevant documents.

The last step on the facility’s privatization phase will be the issuance of the certificate of effectivity (COE), which shall also be the basis for the financial closing and the warranted turnover of the asset to the new owner.