STATE-LED Power Sector Assets and Liabilities Management Corp. (PSALM) on Wednesday declared another failed bidding for the sale of its 650-megawatt (MW) Malaya Thermal Power Plant despite already cutting its price to over a half.
None of the pre-qualified bidders, Panasia Energy, Inc. and Ayala-led AC Energy Philippines, Inc., were able to submit their bids for the power facility now worth P2.19 billion from P4.48 billion previously.
“The PSALM Board already rationalized and lowered the minimum bid price of Malaya in the hope that the bidders would be encouraged to submit their bids. It is regrettable that despite the reduced minimum price, still no bidder submitted a bid,” PSALM President and Chief Executive Officer Irene B. Garcia said in a statement.
Panasia told PSALM in a letter before the bid submission deadline at noon that it is “not financially viable” for it to buy the state asset, while AC Energy said it was “unable to meet” the floor price despite all its efforts.
Last week, the agency said it reduced its minimum bid price considering the following factors: the book value of the plant and its underlying land, the zonal value of the land, the substantial losses continuously incurred by the corporation, its marketability, and electricity demand.
This is already the third failed attempt to sell the said asset since 2019. The state-owned corporation wants its board to “immediately commence the negotiated process of privatization,” lest it sustained more losses in maintaining the power plant.
“PSALM must exhaust the available legal process to dispose Malaya because we are incurring substantial losses in continuously maintaining it,” Ms. Garcia said.
The government-owned thermal generator is losing P1.21 billion annually between 2010 and 2019. Located in Pililla, Rizal, the Malaya facility has been designated as a must-run unit by the Department of Energy (DoE) since 2015. Once it can be privatized, it would not operate as such.
PSALM is privatizing its assets to use the proceeds in settling its maturing obligations and minimize the company’s borrowings. — Adam J. Ang