16 Sep 2020
The Power Sector Assets and Liabilities Management Corporation (PSALM) announces in its latest Bid Bulletin that the Minimum Bid Price set by its Board of Directors for the privatization of the 650-megawatt Malaya Thermal Power Plant (MTPP) and its underlying land is P2,188,400,000.00.
PSALM’s Board of Directors set the said Minimum Bid Price taking into consideration various valuation methodologies and relevant factors. These factors include the book value of the asset, the zonal value of the land, the substantial losses incurred and continue to be incurred by PSALM in maintaining the MTPP, the effects of the Covid-19 pandemic on marketability, the electricity demand, and the need to have a justifiable price that would lead to a successful public bidding. Third party consultant, the Isla Lipana & Co. Pricewaterhouse Cooper Global Network, assisted in this activity.
PSALM submitted this Minimum Bid Price to the Commission on Audit on 25 August 2020 together with the supporting documents and the detailed explanation on how the PSALM Board arrived at the said price.
Bid Submission Deadline is on 23 September 2020 at 12:00 noon, after which the opening and evaluation of bids will immediately commence. All bids are to be submitted at PSALM’s Office located at the 24th Floor of Vertis North Corporate Center 1, North Avenue, Quezon City.
PSALM President and CEO Irene Besido Garcia said, “There were many considerations that had to be looked into by the PSALM Board in setting the Minimum Bid Price, but foremost is the need to arrive at a fair and reasonable Minimum Bid Price that would actually lead to a higher probability of a successful privatization. We need to privatize the Malaya Power Plant this year so that the proceeds of the sale can be used to settle maturing obligations this year and minimize PSALM’s borrowings.”
PSALM had conducted two (2) rounds of public bidding for the sale of said assets on 18 September 2019 and 22 November 2019, respectively. However, both bidding exercises were declared a failure due to lack of interested bidders. After the second round of bidding, PSALM proceeded with a negotiated sale with the lone bidder, however, it was also declared a failure after receiving a bid price below the Minimum Bid Price set for these assets. The Minimum Bid Price in the last public bidding as well as in the negotiated sale was P4,481,796,017.00. Details on the current MTPP bidding activities are found in PSALM’s website: www.psalm.gov.ph.
Corporate Communications Division