Feb. 14--Two investor groups are vying for a government-owned gas turbine power plant in the Visayas the government is putting on the auction block, the Power Sector Assets and Liabilities Management Corp. (PSALM) said Friday.

In a statement, the state-run power sector privatization unit said that two investor groups have submitted the preparatory requirements for the sale of the 55-megawatt Naga land-based gas turbine (LBGT) power plant in a pre-bid conference held on February 12.

"The pre-bid conference allowed the prospective bidders to clarify issues and concerns pertinent to the sale of the Naga power facility. The discussions also covered PSALM's Bidding Procedures," it said.

PSALM added that the interested parties, which were not identified, are both Filipino-owned corporations and are currently undertaking their due diligence on the Naga LBGT power plant that will end on April 20.

The privatization of the Naga plant started last month with the publication of an invitation to bid in local newspapers.

Located at the Cebu I Power Plant Complex in Barrio Colon, Naga, Cebu province, the plant is scheduled for bidding on April 22, 2009.

The said power complex houses a number of thermal and diesel power plants with a total capacity of 203.80-megawatts that are owned by state-owned National Power Corp. (Napocor) but are under a Rehabilitation, Operation, Maintenance, and Management Agreement with listed firm SPC Power Corporation.

SPC sells the electricity generated by the power complex to the state power generating company under a take-or-pay agreement.

Meanwhile, Jose Ibazeta, PSALM president, said that the asset management firm is optimistic that it can retain government's privatization threshold to about the same level before the winning bidder for the 600-megawatt Calaca power plant backed out.

Under the Electric Power Industry Reform Act of 2001, PSALM is tasked to privatize at least 70 percent of the Napocor's power plants and contracted capacities in the Luzon and Visayas grid before open access and retail competition can commence in the power sector.

PSALM already achieved a 70 threshold with the privatization of the Calaca plant, which represents 16 percent of Napocor's capacity in the said grids but French power group Suez Energy pulled out from the sale of the facility.

Industry players expressed concern that the botched sale of the Calaca plant will have a negative impact on the government's power sector privatization program, which has only gained momentum in the past two to three years, and further delay the implementation of open access.

Despite this, PSALM official said that the upcoming sale of the 620-megawatt Limay combined-cycle power plant will make up for the decreased threshold.

"The sale of Limay which has the same size as Calaca power plant will allow us to meet the 70 percent privatization target," Ibazeta said.

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