Government gets hold of $14-M YNN Pacific performance bond
The Philippine Star
07/06/2006
The government has the $14- million proceeds from the YNN Pacific Consortium Inc./Ranhill Berhad performance bond which was forfeited after the group failed to meet the deadline for the delivery of the 40-percent downpayment for the purchase of the Masinloc coal-firedpower plant, the country’s top energy official said.
In a press briefing, Energy Secretary Raphael P.M. Lotilla said the performance bond was released to the Power Sector Assets and Liabilities Management Corp. (PSALM) by Malayan Banking Berhad Sentul Raya and confirmed by its local unit Maybank.
"The cash is already with the trust account of PSALM, and the amount of $14 million is accounted for and was issued by a reputable international bank. Maybank was the confirming local bank," he said.
Lotilla, the vice chairman of PSALM, said the will be considered as part of the government’s privatization proceeds.
"This forms part of the privatization proceeds, and therefore in accordance to the EPIRA (Electric Power Industry Reform Act), it would be spent to pay-off the debts of Napocor (National Power Corp.)," Lotilla said.
He added the government will not go into a negotiated bid with Lopez-owned First Gen Corp., the only other bidder for the 600-megawatt (MW) Masinloc coal-fired facility.
Lotilla pointed out that First Gen’s bid was way below the government’s reserve price of $388 million.
In December 2004, First Gen submitted a bid of $274.85 million while YNN Pacific’s winning bid was $561.74 million.
According to the energy official, the PSALM board will still study the options for the sale of Masinloc although PSALM earlier said it may rebid the power facility "at the appropriate time if conditions warrant."
On the issue of forfeiting the bond, Lotilla said their action is deemed advantageous to the Philippine government.
"I also wanted to stress that the decisions that were made, it was the PSALM board acting solely on the basis of its assessment on what is advantageous for the government and the national interest," he said.
He pointed out that their decision not to extend the June 30 deadline for the payment of $227.54-million upfront cash was warranted since the 27-percent increase in the performance bond from $11 million to $14 million is already ample protection to the government.
"If you recall, the PSALM board had to make an assessment, when we decided to extend and at that time on the condition that there would be an increase in the bond from $11 million to $14 million or an increase of 27-percent on the bid bond," Lotilla said.
"Even if there was a 27-percent increase in the bid bond, the PSALM board decided to extend. And by June 30, the PSALM board again made an assessment on whether or not to close or to call on the bond, considering we also want to ensure the credibility of the privatization process is upheld," Lotilla said.
On Monday, the PSALM board served notice to the YNN-Ranhill consortium of the bond forfeiture for the group’s failure to come up with the upfront payment last Friday.
The PSALM board is chaired by Finance Secretary Margarito B. Teves. The secretaries of trade and industry, budget and management, and justice and the director general of the National Economic and Development Authority, and their representatives also sit as ex-officio members with PSALM president Nieves Osorio.
Lotilla also noted that selling the coal plant without a transition supply contract (TSC) was a major factor that bogged down the sale of the power plant.
He said that they are still waiting for the Manila Electric Co. (Meralco), the country’s largest power distributor, to firm up a TSC with Napocor.
07/06/2006
The government has the $14- million proceeds from the YNN Pacific Consortium Inc./Ranhill Berhad performance bond which was forfeited after the group failed to meet the deadline for the delivery of the 40-percent downpayment for the purchase of the Masinloc coal-firedpower plant, the country’s top energy official said.
In a press briefing, Energy Secretary Raphael P.M. Lotilla said the performance bond was released to the Power Sector Assets and Liabilities Management Corp. (PSALM) by Malayan Banking Berhad Sentul Raya and confirmed by its local unit Maybank.
"The cash is already with the trust account of PSALM, and the amount of $14 million is accounted for and was issued by a reputable international bank. Maybank was the confirming local bank," he said.
Lotilla, the vice chairman of PSALM, said the will be considered as part of the government’s privatization proceeds.
"This forms part of the privatization proceeds, and therefore in accordance to the EPIRA (Electric Power Industry Reform Act), it would be spent to pay-off the debts of Napocor (National Power Corp.)," Lotilla said.
He added the government will not go into a negotiated bid with Lopez-owned First Gen Corp., the only other bidder for the 600-megawatt (MW) Masinloc coal-fired facility.
Lotilla pointed out that First Gen’s bid was way below the government’s reserve price of $388 million.
In December 2004, First Gen submitted a bid of $274.85 million while YNN Pacific’s winning bid was $561.74 million.
According to the energy official, the PSALM board will still study the options for the sale of Masinloc although PSALM earlier said it may rebid the power facility "at the appropriate time if conditions warrant."
On the issue of forfeiting the bond, Lotilla said their action is deemed advantageous to the Philippine government.
"I also wanted to stress that the decisions that were made, it was the PSALM board acting solely on the basis of its assessment on what is advantageous for the government and the national interest," he said.
He pointed out that their decision not to extend the June 30 deadline for the payment of $227.54-million upfront cash was warranted since the 27-percent increase in the performance bond from $11 million to $14 million is already ample protection to the government.
"If you recall, the PSALM board had to make an assessment, when we decided to extend and at that time on the condition that there would be an increase in the bond from $11 million to $14 million or an increase of 27-percent on the bid bond," Lotilla said.
"Even if there was a 27-percent increase in the bid bond, the PSALM board decided to extend. And by June 30, the PSALM board again made an assessment on whether or not to close or to call on the bond, considering we also want to ensure the credibility of the privatization process is upheld," Lotilla said.
On Monday, the PSALM board served notice to the YNN-Ranhill consortium of the bond forfeiture for the group’s failure to come up with the upfront payment last Friday.
The PSALM board is chaired by Finance Secretary Margarito B. Teves. The secretaries of trade and industry, budget and management, and justice and the director general of the National Economic and Development Authority, and their representatives also sit as ex-officio members with PSALM president Nieves Osorio.
Lotilla also noted that selling the coal plant without a transition supply contract (TSC) was a major factor that bogged down the sale of the power plant.
He said that they are still waiting for the Manila Electric Co. (Meralco), the country’s largest power distributor, to firm up a TSC with Napocor.
0 Comments:
Post a Comment
<< Home