Korean firm Soosan ENS Company Limited (Soosan) which ran several state-owned power plants topped the bid for the operation and maintenance contract for Casecnan Hydroelectric Power Plant (CHPP) with the lowest offer of P253 million which was almost half of the P462 million budget alloted for it.
State holding firm Power Sector Assets and Liabilities Management Corporation (PSALM) evaluated the bids for the contract on 12 October 2021.
Soosan was also the former operator of the Rizal diesel-fired power plant and has won a similar deal for the 650-megawatt Malaya thermal power plant.
The Korean heavy equipment supplier bested the bids of SN Aboitiz Power-Magat Inc. and KEPCO KPS Philippines Corporation which submitted offers amounting to P261.56 million and P391.5 million respectively.
Privatization ultimate goal
The next stage for the process will be for PSALM to subject Soosan’s bid to the post-qualification process, pursuant to Republic Act 9184.
PSALM added the post-qualification process will ensure that Soosan indeed met all the financial and legal requirements as indicated in the bidding documents.
If Soosan passes the post-qualification process, it will be allowed sufficient lead time to familiarize itself with the CHPP’s operations before the start of the contract on 26 November.
“We are optimistic that with the successful public bidding for the Casecnan Plant’s operation and maintenance contract, PSALM can now proceed to prepare for the ultimate plan of privatizing the Casecnan Plant, consistent with the clear mandate in the Electric Power Industry Reform Act,” PSALM President and CEO Irene Besido-Garcia said.
The CHPP is a 165-megawatt combined irrigation and power generation facility located at Sitio Pauan, Barangay Villarica, Pantabangan, Nueva Ecija.
The CHPP is covered by a build, operate and transfer agreement ending on 11 December 2021. Once the deal expires, the National Irrigation Administration (NIA) will own 40 percent of CHPP while 60 percent goes to PSALM.
However, the NIA has allowed PSALM to handle the procurement of the contract and to start the preparation for privatization of CHPP.
The CHPP is a “run-of-river” type of plant with very limited impounding area. The water from the reservoir flows into the plant’s powerhouse, down to the Pantabangan lake and into the irrigation channels.
NIA will continue its mandate of irrigating farmlands despite the privatization of the power component of the facility.