By Alena Mae S. Flores

EMERALD Energy Corp., the corporate vehicle of French energy firm Suez Energy, has decided against buying the 600-megawatt Calaca power plant in Batangas, citing the coal-fired plant?s deteriorating condition, the government announced over the weekend.

In a statement, the state-run Power Sector Assets and Liabilities Management Corp. said it would evaluate the notice from Emerald Energy to decide what to do next.

It said it had the option to forfeit Emerald Energy?s $15-million bond, which was equivalent to 2 percent of its $787-million bid.

PSALM said it would immediately prepare the plant for re-bidding, and that it was committed to selling off all the government?s power plants despite the setback.

The privatization of state-run National Power Corp.?s power plants would reach only 56 percent?instead of 70?percent-without the sale of the Calaca plant.

In its letter to PSALM dated Jan. 23, Emerald Energy said it had observed the deterioration of the Calaca plant since the bidding on Oct. 16, 2007, and up to the end of last year.

The company offered the highest bid of $787 million for the plant, and it would have been Suez Energy?s first investment in the Philippines had the deal closed.

The plant?s alleged deterioration aside, Emerald Energy?s failure to convince Napocor to raise the basic rate for the plant?s electricity had also delayed the deal?s closure.

Earlier, Suez Energy claimed that the use of coal from Semirara in Capiz to fire the plant triggered its severe deterioration.

Sources said the company had decided to close its Philippine office following its decision not to buy the plant, but it wasn?t clear how many employees would be affected.

Emerald Energy officials could not be reached for comment.

Suez, a leading energy provider, employs 196,500 people worldwide.

The group is listed on the Brussels, Luxembourg and Paris stock exchanges, and in 2007 its sales reached 74.3 billion euros.