By Alena Mae S. Flores

Power Sector Assets and Liabilities Management Corp. will proceed with a negotiated bid to sell the 600-megawatt Calaca coal power plant after forfeiting the $15-million performance bond of Emerald Energy Corp., the corporate vehicle of Suez Energy of France, a PSALM official said yesterday.

?We will rebid Calaca. The bidding failed twice already so under the rules, we are free to enter into a negotiatied bid with interested buyers. We will write to those that expressed interest [in the previous bidding],? PSALM president Jose Ibazeta said during a congressional hearing yesterday.

Ibazeta said PSALM would push through with the negotiated bidding this year despite the downturn in the global financial markets.

PSALM claimed the bond, equivalent to 2 percent of the purchase price of $787 million, shortly after Suez Energy terminated its purchase of the Calaca plant, citing its deteriorating condition.

The bid rules allow PSALM to go ahead with a negotiated bid after two or more failed auctions. It can enter into simultaneous negotiations with more than one bidder, especially those who qualified.

PSALM will ask the prospective bidder to submit an offer higher than the reserve price. PSALM can also ask the bidder to improve its offer if it falls below the reserve price.

Suez beat AES Corp. of the United States, First Gen Corp. of the Lopez Group and International Power Plc. with a $786.527-million bid in an Oct. 16, 2007 auction.

The original bidders of the Calaca power plant included One Energy, Phil-Mal Energy, JSW Energy, Calaca High Power, AES Calaca Pte., Salcon Power Corp. and Korea Electric Power Corp.

Other prospective bidders were DMCI Holdings, Marubeni Corp., Anglo-Cayman, Global Business Resources, YTL Power International, Trans-Asia Oil and Energy, Bansec Group and CBI-Global Netherlands B.V.

Ibazeta conceded that the Calaca facility might no longer fetch the same price as the one offered by Suez because of the different assumptions taken by prospective bidders.

Ibazeta said Suez offered a good price for the plant when it was bid out in October 2007 after reviewing the plant?s expansion capacity.

?Emerald seem to be bent in increasing the capacity of the plant so when they were making the bid, they set their sites on 1,200 MW. Their mindset was increasing the capacity of the plant as opposed to the mindset of the other bidders,? he said.

Ibazeta also said Suez?s decision to withdraw from the deal affected government?s privatization program for the power sector.

The privatization level of National Power Corp.?s facilities dropped to 54 percent from 70 percent as the Calaca facility accounts for 16 percent.

?The privatization affected the hitting of open access. To recall, there was a proposal for interim open access so that also affected the interim open access,? Ibazeta said, noting that the closure of the Calaca sale was one of the prerequisites of the interim open access.

The arrangement gives large power users with a monthly consumption of 1 MW the option to choose their power supplier.

?Having said that, we are in the process of speeding up the privatization of the plants,? he said.