DMCI Holdings Inc. (DMCIHI) was declared the highest bidder for the 600-megawatt (MW) Batangas (Calaca) Coal-Fired Thermal Power Plant in the negotiated sale conducted yesterday (08 July 2009) by the Power Sector Assets and Liabilities Management Corporation (PSALM).

By successfully selling the Calaca power facility, PSALM also breached the 70% targeted privatization level for generating assets in the Luzon and Visayas grids as one of the preconditions to the declaration of open access and retail competition stipulated in the Electric Power Industry Reform Act.

DMCIHI offered USD361,709,000 for the Batangas-based power plant to edge out Thailand corporation Banpu Power Limited.

Incorporated in 1995, DMCIHI is the firm that consolidates all construction business, construction component companies, and related interests of the Consunji family. Its core businesses include construction, real estate, and coal mining. DMCIHI owns 56% of Semirara Mining Corporation, which has exclusive rights to explore, mine and develop the coal resources on Semirara Island in Caluya, Antique.

DMCIHI will be declared the winning bidder after PSALM verifies the accuracy, authenticity and completeness of all the bid documents that the consortium had submitted.

PSALM will then issue the Notice of Award to DMCIHI, officially signifying that the company is the winning bidder for the Calaca power plant.

The Calaca facility has been allocated a substantial 287-MW power supply contract, or about 48% of the plant’s rated capacity. This will provide the new owner a ready market for the electricity that the power plant will generate. The Manila Electric Company will assume the biggest portion of the contracted energy, which is equivalent to 169 MW.

In surpassing the 70% threshold through the privatization of the Calaca power plant, PSALM moved the Philippine electricity industry closer to the highly-anticipated era of open access and retail competition. This significant milestone could have been achieved in 2008 had it not been for the decision of Emerald Energy Corporation (EEC), formerly Calaca Holdco Inc., the winning bidder in the last round of the Calaca bidding held on 16 October 2007, to terminate its purchase of the asset.

With the privatization of the Calaca power facility, PSALM has now successfully bid out 18 plants. This translates to 2,767.23 MW operating capacity, or 73.24% of the 3,778.23-MW aggregate capacity of all generating plants in Luzon and the Visayas.