Manila Thermal Power Plant

The Manila Thermal Power Plant (MTPP) is a decommissioned power plant found in Isla de Provisor, Paco, Manila (Philippines), along the Pasig River. It was sold to Malaysian firm Gagasan Steel, Inc. by Power Sector Assets and Liabilities Management Corporation (PSALM), an agency of the Philippine government tasked to privatize underperforming power assets.

History

The power plant was composed of two units: Unit One was commissioned on September 1, 1965, and Unit Two was commissioned on October 15, 1966. Owned by the National Power Corporation, each unit can produce up to 100 megawatts. The power plant substantially contributed power to the Luzon Grid until they were both retired on January 2000.^[1]

Auction

After it was decommissioned, PSALM tried to auction the plant and the two-hectare land it stands on. The government has been trying to sell power assets to help boost revenue and encourage private investments in power generation to create a competitive electricity market and eventually lower power costs.^[2] PSALM expected MTPP's potential bidders to come from the construction and steel sectors. On its first try on the first quarter of 2005, the auction failed due to lack of investor interest. A second try, on the last quarter of 2006, similarly failed.^[3]

On its third attempt on February 2008, the government decided to include the land on which the power plant is erected to increase interest; the property is near SM City Manila and other commercial centers.^[1] However, it failed anew since South Korea-based JC Ethanol and Metal Trading Corp. offered a price lower than what the government was willing to accept. Malaysia's Gagasan Steel didn't meet technical requirements, and as a result was disqualified from the bidding.^[2]

In April 2008, PSALM entered into negotiated bid and completed negotiations with Gagasan Steel to acquire the MTPP for US$2.5 million. The auction did not include the underlying land because foreign companies are not allowed to own land in the Philippines. PSALM issued to Gagasan the notice of award and certificate of effectivity after the Malaysian firm gave PSALM a performance bond of US$1.253 million. Gagasan will be responsible for the dismantling of the facilities and site clean-up, for six months subject to extension.^[4]

References

1. ^ ^{a b} Isla, Paul Anthony (2007-10-24). "Manila Thermal Power Plant tainted by toxins, but PSALM denies report". Business Mirror. http://www.businessmirror.com.ph/10242007/economy06.html. Retrieved 2009-11-29. ^{[dead link]}
2. ^ ^{a b} Javier, Luzi Ann (2008-02-06). "Philippines Fails to Sell Manila Thermal Power Plant". Bloomberg.com. http://www.bloomberg.com/apps/news?pid=20601080&sid=aSJlspCbQVto. Retrieved 2009-11-29. 
3. ^ Ho, Abigail (2009-10-19). "12 firms eye retired power plant in Manila". INQUIRER.net. http://business.inquirer.net/money/topstories/view/20071019-95369/12_firms_eye_retired_power_plant_in_Manila. Retrieved 2009-11-29. 
4. ^ "Gagasan Steel is new owner of Manila Thermal Power Plant". GMANews.tv. 2008-05-17. http://www.gmanews.tv/story/95800/Gagasan-Steel-is-new-owner-of-Manila-Thermal-Power-Plant. Retrieved 2009-11-29.