Gov’t to scrap YNN contract
The Philippine Star
07/07/2006
The merchant contract of the YNN Pacific Consortium will be terminated by Monday, the Department of Finance (DOF) announced yesterday after forfeiting the group’s $14-million performance bond.
The bond was ordered forfeit by the Power Sector Assets and Liabilities Management Corp. (PSALM) earlier after YNN failed to deliver the upfront payment of $227.54 million for the acquisition of the Masinloc power plant.
Finance Secretary and PSALM chairman Margarito B. Teves said yesterday that consistent with PSALM’s process, it would issue the notice of termination of contract on or before Monday, July 10.
"Termination takes effect 30 days after the notice is issued," Teves said.
He said the PSALM board had already given YNN ample time to settle payment, agreeing to extend the March 31, 2006 deadline to June 30, 2006. The condition was to raise the bond from $11 million to $14 million.
After YNN failed again, Teves said the PSALM board decided to forfeit the bond and terminate the contract.
"It was reasonable to grant them the first extension since the government had a good price at $561.7 million and was protected by the increased performance bond," he said. "But PSALM stood firm on the June 30 deadline."
According to Teves, the board has started to consider its options on when the Masinloc plant should be put on the auction block again.
"Our main concern is to ensure that the public will have ready access to power and energy at the lowest possible price," he said.
The only other bidder for the Masinloc plant was First Generation Holdings which made a bid of $274.85 million, much lower than the YNN bid and below the government’s reserve price of $388 million.
07/07/2006
The merchant contract of the YNN Pacific Consortium will be terminated by Monday, the Department of Finance (DOF) announced yesterday after forfeiting the group’s $14-million performance bond.
The bond was ordered forfeit by the Power Sector Assets and Liabilities Management Corp. (PSALM) earlier after YNN failed to deliver the upfront payment of $227.54 million for the acquisition of the Masinloc power plant.
Finance Secretary and PSALM chairman Margarito B. Teves said yesterday that consistent with PSALM’s process, it would issue the notice of termination of contract on or before Monday, July 10.
"Termination takes effect 30 days after the notice is issued," Teves said.
He said the PSALM board had already given YNN ample time to settle payment, agreeing to extend the March 31, 2006 deadline to June 30, 2006. The condition was to raise the bond from $11 million to $14 million.
After YNN failed again, Teves said the PSALM board decided to forfeit the bond and terminate the contract.
"It was reasonable to grant them the first extension since the government had a good price at $561.7 million and was protected by the increased performance bond," he said. "But PSALM stood firm on the June 30 deadline."
According to Teves, the board has started to consider its options on when the Masinloc plant should be put on the auction block again.
"Our main concern is to ensure that the public will have ready access to power and energy at the lowest possible price," he said.
The only other bidder for the Masinloc plant was First Generation Holdings which made a bid of $274.85 million, much lower than the YNN bid and below the government’s reserve price of $388 million.
0 Comments:
Post a Comment
<< Home