STATE-RUN Power Sector Assets and Liabilities Management Corp. declared Wednesday as failure the bidding for the independent power producer administrator (IPPA) contract for the 650-megawatt Malaya thermal power plant in Rizal.

Conrad Tolentino, PSALM vice president for electricity trading, made the announcement after the government received only one offer in time for the 12 noon deadline Wednesday. The lone bid was from First Gen Luzon Power Corp. “There being only one bid, there is a failure of bidding for the appointment of the IPP administrator for the Malaya thermal power plant,” Tolentino said. Under the PSALM bidding procedures, at least two offers should be submitted.

PSALM was expecting two other bidders, Trans-Asia Oil and Energy Development Corp. (TA-Oil) and Pacifica Inc. Both listed firms did not submit their bids, however. Diversifying conglomerate San Miguel Corp., which earlier expressed interest in the IPPA contract, was not included in the PSALM list. Tolentino said the PSALM board had yet to decide on and schedule another bidding for the IPPA contract.

The successful bidding of the Malaya IPPA would have allowed the government to breach the 70-percent privatization level required by law to trigger the start of the open access and retail competition. Under the open access regime, large power users will be able to choose their own power suppliers.

Before open access can be implemented, RA 9136 or the Electric Power Industry Reform Act of 2001, mandates that five requirements be met: the establishment and commercial operation of the wholesale electricity spot market, the approval of unbundled transmission and distribution wheeling charges, the implementation of the cross-subsidy removal scheme, the privatization of 70 percent of Napocor’s Luzon and Visayas capacities, and the transfer of 70 percent of Napocor capacity covered by independent power producer contracts to IPPAs.

A number of energy industry players and businesses are awaiting the implementation of open access. Some players in the energy sector had petitioned the Energy Regulatory Commission to implement an “interim open access” while waiting for all the requirements to be met.

The Malaya thermal power plant is currently operated by Korea Electric Power Corp., through Philippine subsidiary Kepco-Philippines. It won a 15-year rehabilitate-operate-manage-maintain contract in June 1995. The contract ends this year.

The plant rehabilitation was completed 10 months earlier with the recovery of its original rated generation capacity of 650 MW and with the improvement of its thermal efficiency by an average of 4.5 percent. The 20-year old power plant supplies electricity to Bulacan, Rizal, and Laguna.