PSALM confident of hitting privatization goal for Napocor assets

MANILA, Philippines – The Power Sector Assets and Liabilities Management Corp. (PSALM) is optimistic it could still achieve its 100-percent privatization target for National Power Corp. (Napocor) generating assets this year.

“PSALM remains optimistic about privatizing 100 percent of Napocor’s generation assets in 2009 starting with the rebidding of the Calaca facility,” PSALM president Jose Ibazeta said, in a company report released recently.

“If I can sell the Calaca and Limay, it will be close to 85 to 88 percent within the year. Right now, since we did not close the Calaca, it’s about 57 percent,” he said.

On top of these two power facilities, PSALM is also scheduled to dispose of a number of decommissioned power plants this year.

The PSALM chief said that despite the impact of the global financial crunch, there are still investors expressing interests to join the bidding for Napocor assets.

“Investor interest is still very strong. We actually don’t have too many generating assets left to sell. We’re just left now with the bunker fired plants, but the main plants I hope to conclude the Calaca and Limay within this year. After that Napocor is really left with very small plants. Local interest within the region is quite strong,” he said.

Since Calaca and Limay have both undergone two failed biddings, PSALM will have no choice but to sell it through negotiated bid.

“We will have negotiated bidding for both plants. We’re now just formulating the documents,” Ibazeta said.

In explaining the process of a negotiated bidding, Ibazeta said, “anybody who has interest, can on a specified date after they sign on the regular, legal, financial documents, is qualified to come in on a date and bid for the plant.”

“We have a reserve price that the Board will set up on that particular day. So if they don’t meet the reserve price, if anybody does not meet the reserve price. Then we will declare our reserve price and they will go through an auction. If one or two meet the reserve price, we eliminate everybody that did not meet and just go on with the process until it goes to auction. If nobody shows up, and there’s only one guy who shows up — we will negotiate with them,” he said.

Ibazeta said they will put either Calaca or Limay in the auction block within the first half of this year.

“I’m looking forward to at least one of them going before the end of the first half — which is most probably Calaca,” he said.–Donnabelle L. Gatdula, Philippine Star