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22 December 2004 - The Philippines Department of Finance will today confirm the sale to YNN Pacific Consortium, Inc. of the 600 MW Masinloc power plant for $561m.
In Tuesday's press conference, Finance Secretary Juanita Amatong said YNN would then have to submit a bid security of 2.0 per cent of the bid price for the power plant.
The Masinloc facility, located in Zambales province in northern Philippines, is the first of the high-capacity power plants to be offered for sale by the government's power privatization arm, the Power Sector Assets and Liabilities Management Corporation (PSALM). Masinloc is the sixth power plant to be successfully privatized through bidding.
Masinloc is being sold as a merchant plant without any accompanying power supply contract.
The sale of Masinloc was viewed by the international investment community as an indication that the Philippines was on its way to fiscal consolidation, as it would free the national government of the burden of shouldering part of the obligations of the National Power Corp. (Napocor).
Once the deal is set into force, Amatong said YNN would have to pay an upfront fee of $224.7m representing 40 per cent of the bid price.
Senate Minority Leader Aquilino Pimentel Jr. earlier urged the Department of Energy to stop the sale of Masinloc, in view of allegations that the winning bidder YNN Pacific Consortium, Inc. lacked the capital and track record to operate the power plant. Pimentel alleged that the bidder had a paid-up capital of only P625,000 ($11,100) and a maximum capitalization of P10m, when the power plant's purchase price is $561.74m. The government insisted that the company would not risk losing the upfront fee if it could not afford the deal.
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