Masinloc attracting flock of new bidders
Manila Bulletin
July 4, 2006
The 600-megawatt Masinloc coal-fired power facility, of which sale has been aborted because of the winning bidder’s failure to put up required downpayment is now attracting horde of prospective bidders should the Power Sector Assets and Liabilities Management Corporation (PSALM) set it on auction one more round.
However, the investors have one common concern that shall be considered by privatization implementers -that is for government to re-evaluate the reserve price. This is currently set at $ 388 million.
PSALM moved for the forfeiture of the $ 14-million bond deposit submitted by YNN and new partner Ranhill Power Berhad after the group failed to pay the required downpayment of $ 227.54 million on their June 30 deadline.
Since the government hints of a re-bidding of the asset at "appropriate time"; at least four interested investors have indicated fresh interest to join the auction. Two of these are American companies and the rest are Asian energy firms.
"The plant can be re-bid at the appropriate time if conditions warrant," PSALM has noted; but no specific timeframe was given on when they shall decide on this.
A source from one of the American firm stressed that "the reserve price shall be made more reasonable so it becomes attractive to buyers, otherwise if they prefer a higher price for the sale, the consumers will be burdened with expensive electricity rates and we don’t want blamed for that."
The new flock of interested buyers of the Masinloc asset are saying that the $ 561.74 million purchase price tendered by YNN Pacific Holdings may not be matched anymore when PSALM rebids the plant.
PSALM explained that the valuation on the Masinloc plant had been based on long-run avoidable cost; or the funding an investor would need to sink in as referenced on a "best entrant facility."
To date, Masinloc is considered one of National Power Corporation’s (NPC) "crown jewel" that generates earnings for its coffers and also provides one of the cheapest electricity rates to consumers.
Masinloc was deemed to have high availability and reliability as measured by its relatively low forced outage rate of 1.20 percent and 2.20 percent, chiefly in 2001 and 2002.
For lack of transmission constraints, it is likewise expected that the plant would be dispatched at its full load to the Luzon grid.
Given the need for new capacity, Masinloc also has good potential for expansion of another 300 megawatts; giving future owners "economy scale" in terms of use of common facilities and less hassle on the typically tedious process of securing sites for coal-fired power plants.
The plant currently has two units with 300-MW of installed capacity each and its useful life can be as long as 50 years.
As can be seen from the power development blueprint’s supply-demand data, even Luzon grid is now suffering from thinning reserves and this signals the need for new investments in power plants, otherwise, the country will be plunged into a new round of crisis.
July 4, 2006
The 600-megawatt Masinloc coal-fired power facility, of which sale has been aborted because of the winning bidder’s failure to put up required downpayment is now attracting horde of prospective bidders should the Power Sector Assets and Liabilities Management Corporation (PSALM) set it on auction one more round.
However, the investors have one common concern that shall be considered by privatization implementers -that is for government to re-evaluate the reserve price. This is currently set at $ 388 million.
PSALM moved for the forfeiture of the $ 14-million bond deposit submitted by YNN and new partner Ranhill Power Berhad after the group failed to pay the required downpayment of $ 227.54 million on their June 30 deadline.
Since the government hints of a re-bidding of the asset at "appropriate time"; at least four interested investors have indicated fresh interest to join the auction. Two of these are American companies and the rest are Asian energy firms.
"The plant can be re-bid at the appropriate time if conditions warrant," PSALM has noted; but no specific timeframe was given on when they shall decide on this.
A source from one of the American firm stressed that "the reserve price shall be made more reasonable so it becomes attractive to buyers, otherwise if they prefer a higher price for the sale, the consumers will be burdened with expensive electricity rates and we don’t want blamed for that."
The new flock of interested buyers of the Masinloc asset are saying that the $ 561.74 million purchase price tendered by YNN Pacific Holdings may not be matched anymore when PSALM rebids the plant.
PSALM explained that the valuation on the Masinloc plant had been based on long-run avoidable cost; or the funding an investor would need to sink in as referenced on a "best entrant facility."
To date, Masinloc is considered one of National Power Corporation’s (NPC) "crown jewel" that generates earnings for its coffers and also provides one of the cheapest electricity rates to consumers.
Masinloc was deemed to have high availability and reliability as measured by its relatively low forced outage rate of 1.20 percent and 2.20 percent, chiefly in 2001 and 2002.
For lack of transmission constraints, it is likewise expected that the plant would be dispatched at its full load to the Luzon grid.
Given the need for new capacity, Masinloc also has good potential for expansion of another 300 megawatts; giving future owners "economy scale" in terms of use of common facilities and less hassle on the typically tedious process of securing sites for coal-fired power plants.
The plant currently has two units with 300-MW of installed capacity each and its useful life can be as long as 50 years.
As can be seen from the power development blueprint’s supply-demand data, even Luzon grid is now suffering from thinning reserves and this signals the need for new investments in power plants, otherwise, the country will be plunged into a new round of crisis.
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