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Calaca winning bidder opts out of asset sale

26 January 2009

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The winning bidder for the Calaca Coal-Fired Thermal Power Plant has decided to terminate its purchase of the asset due to the deterioration of the power plant since its bidding date on 16 October 2007.

In a letter to the Power Sector Assets and Liabilities Management Corporation (PSALM) dated 23 January, Emerald Energy Corporation (EEC), formerly Calaca Holdco, Inc., stated that it observed the deterioration in the condition of the Calaca plant since the bidding date until the end of 2008.

One of the conditions for the turnover of the power plant is that it should be delivered to the winning bidder “as is, where is,” or in the same condition as it was during the bidding date.

With EEC’s observation, it gave notice of termination of the Asset Purchase Agreement for the sale of the plant.

PSALM will evaluate the notice from EEC to determine the government’s options under the circumstances.

Despite the turn of events, PSALM remains committed to privatizing 100% of the government’s generation assets. PSALM will also immediately prepare the Calaca plant for re-bidding.

EEC was the highest bidder for the Calaca plant with a bid of USD787 million.