Aboitiz power unit to bid for Masinloc coal plant

Aboitiz power unit to bid for Masinloc coal plant

Monday, August 28th 2006

ABOITIZ Equity Ventures Inc. will participate in the new bidding for the 600-megawatt (MW) Masinloc coal-fired power plant, provided that there are attached supply contracts for at least 50-percent of the plant’s capacity.

AEV executive vice president and chief operating officer Erramon Aboitiz said 50 percent, or at least 300 MW, of the plant’s capacity should have sure offtakers for the company to consider bidding for it.

“We’ll see what the terms are for the Masinloc re-bid,” Aboitiz said. “If there are some contracts assigned, we may participate. [Supply contracts] should be for a minimum of 50 percent of the capacity.”

The Power Sector Assets and Liabilities Management Corp. (PSALM) has decided to re-bid the Masinloc plant, following the termination of its asset purchase agreement with the previous winning bidder YNN Pacific Consortium Inc.

PSALM president Nieves Osorio had earlier said that the generation facility would again be offered to interested investors through a public bidding.

But the agency tasked to privatize the National Power Corp.’s generation and transmission assets has yet to set a concrete schedule for the auction.

“We have to make sure that favorable conditions are in place as we must have enough bidders to ensure that government will get competitive offers,” Osorio said.

“Considering the recent experience, investors need to be assured of a market for Masinloc’s power output. Aside from power sales contracts, the wholesale electricity spot market, which is now operating, provides a market-driven venue through which generators can sell the electricity they produce.”

By the time PSALM places the Masinloc plant on the auction block again, the electricity bourse will have already established a “favorable track record,” Osorio added.

PSALM’s asset purchase agreement with YNN was formally terminated last Aug. 6. The group forfeited its 227-million dollar down payment for the plant.

Copyright 2006 Inquirer. All rights reserved.

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