Bidding for Philippine thermal plant designed to fail?

PSALM's offer of P348.91-million for the one-year operation of the 145.8-megawatt Naga thermal power facility in Cebu was found to be exorbitant by some bidders.

The amount will be on top of Power Sector Assets and Liabilities Management Corporation or PSALM’s allotment for additional expenses on fuel to run the thermal power facility.

For this round of O&M invitation, PSALM has not issued any formal notice to the media or at its website and it was not known if the PSALM Board has already given its go-signal for the company to enter into a “negotiated deal” with any party for the contract, following two failed biddings.

It must be noted that the first O&M for the Naga facility amounted to P148.99 million for six months; hence, it can be readily deduced that the one-year contract offer would be more than double the previous cost.

Others also found one of the conditions peculiar, with the PSALM bid notice stipulating that all interested and qualified parties must have “at least 60-percent interest belonging to citizens of the Philippines,” given that the operation of generation company is not actually restricted by nationality requirements.

Bidders at different power assets being auctioned by PSALM are also complaining of the “stringent” and ‘strange’ conditions being integrated in the terms of reference.

For instance, they noted that the bid preparation timeframe is just normally seven days, and when parties inquire at the PSALM data room, the answer they will get would be: “we are not aware of the bidding.”

Site visits are also scheduled just a day before the bid submission date, hence, many of the interested groups are backing out. Many parties reckoned that the bidding processes are allegedly designed “to fail, so a preferred party may eventually get the deal.”

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