Monday, April 28, 2008 Manila Thermal power plant sold
AFTER three failure biddings, the Power Sector Assets and Liabilities Management (Psalm) has decided to enter into a negotiated bid and completed the negotiations with Malaysian-based firm Gagasan Steel for the sale of the decommissioned Manila Thermal Power Plant (MTPP).
"Gagasan Steel agreed to pay the aggregate amount of US$2.5 million for the plant equipment, components, auxiliaries and accessories of the MTPP," Psalm said.
Under the terms of sale, Gagasan Steel will be responsible for the dismantling of the plant equipment and environmental cleanup.
The technical working group reviewed the negotiating documents submitted by Gagasan Steel and found them fully compliant with all requirements prescribed by Psalm, subject to verification of the authenticity and veracity of the submissions, the government's power privatization arm added.
Gagasan Steel, an affiliate of Malaysia-based Gagasan Steel Sdn Berhad, is an import-export handler, dealer and trader of scrap metals and has been in operation since 2002. Its local clients include the National Power Corporation (Napocor) and the Manila Electric Company (Meralco).
Psalm first auctioned MTPP in the first quarter of 2005, but the bidding was declared a failure due to lack of investor interest.
In 2007, Psalm once again lined up for bidding the MTPP, but the bidding was again declared a failure and in February of this year, the agency once more auctioned the retired plant, however, interested investors failed to meet the technical qualifications.
Psalm then decided to conduct negotiations with Gagasan Steel after the third bid exercise was declared a failure.
Gagasan Steel Incorporated, and JC Ethanol and Metal Trading Corporation, a South Korea-based company, submitted their respective bids during the February 6 auction held at Psalm main office in Makati.
However, the Psalm privatization, bids and awards committee (Pbac) rated the technical bid of JC Ethanol's technical bid submission "failed", thus preventing it from further participating in the bidding exercise.
Gagasan, on the other hand, reached the culmination of the bidding process -- the opening of the financial bid.
But Psalm president and chief executive officer (CEO) Jose Ibazeta informed the company that its bid offer for the MTPP did not meet the reserve price set by the Pbac.
Gagasan Steel was the only bidder to pass the technical qualifications, but the firm fell short of the reserve price.
The MTPP, which is located at Isla de Provisor, Paco, Manila, was sold on an "as is where is" basis but did not include the underlying land.
Measuring two hectares, the land is ideal for industrial purposes and is located in a prime area. It is also near SM Manila and other commercial centers. (MSN/Sunnex)
