MANILA - The state-run Power Sector Assets and Liabilities Management Corp. (Psalm) said there are five groups that have expressed interest to participate in the second round of bidding for the independent power producer (IPP) contracts of the 1,000-megawatt (MW) Sual and the 700-MW Pagbilao coal-fired power plants.

The government agency said it remains optimistic it can successfully bid out the IPP contracts. In a phone interview, Conrad Tolentino of Psalm’s corporate communications department said they are scheduled to bid out the IPP contracts again on August 28.

He declined to provide details of the interested parties, saying he could not disclose the names before the bidding date. “We still don’t know which of the five groups will push through [with their bid],” said Tolentino.

Psalm will hold a second round of bidding for the selection of IPP administrator, after the first exercise held on June 26 failed because the two participating bidders did not meet the reserve price set by the Psalm board for the contracted capacities of the Sual and Pagbilao power plants.

Psalm’s Bids and Awards Committee (PBAC) stressed that only investors meeting the submission deadline set on August 3 would be allowed to participate in the bidding for the power contracts.

Interested investor groups were also required to pay a nonrefundable fee of $5,000 and execute a Confidentiality Agreement and an Undertaking with Psalm. A prebid conference for prospective bidders was held on August 5.

The PBAC pointed out that qualified bidders must submit an offer for both the Pagbilao and the Sual contracts. Only one bidder can be declared the winner for either the Pagbilao IPPA or the Sual IPPA.

If the bidder is the highest bidder for both contracts, the PBAC will select which contracted capacity to award to the bidder to check concerns regarding market dominance.

In case of a failed bidding, Psalm will enter into negotiations in accordance with its negotiation procedures contained in the bidding package given to the qualified bidders.

The 1,700-MW aggregate contracted capacities of the Sual and Pagbilao power plants represent around 34.7% of the contracted capacity of the IPP contracts for Luzon and the Visayas.

Psalm is pursuing the bidding as it seeks to hit the 70% requirement to privatize the contracted capacities under the IPP contracts this year to meet the last precondition for open access and retail competition as stated in the Electric Power Industry Reform Act.