Publicly listed SPC Power Corp. (SPC) called the recent ruling of the Supreme Court on the Naga Power Plant Complex in Cebu as “grossly disadvantageous to the government.”
According SPC in a statement, it is preparing its motion for reconsideration to the High Court, which reiterates SPC’s position that the decision “destabilizes the investment climate in the Philippines and retroactively changes the rules on competitive bidding.”
“With the Supreme Court’s ruling to reinstate the Notice of Award to Therma Power Visayas Inc. (TPVI), the government not only stand(s) to lose P54 million but is deprived of a rebid of the Naga Power plant which would likely result in an even higher price for the government,” SPC said in a statement.
The move followed the previous ruling of the High Tribunal which declared as null and void SPC’s right to top the bid of TPVI by five percent.
Contrary to earlier stand
SPC said the High Court’s decision to reinstate the award of the Naga facility to TVPI is contrary to its earlier position that “public bidding is the better means to secure the best bid for the government.”
The SC, in its decision dated Sept. 28, 2015, stated that “attracting as many bidders to participate in bidding for public assets is still the better means to secure the best bid for the government and achieve the objective under EPIRA (Electric Power Industry Reform Act) to privatize NPC (National Power Corporation) assets in the most optimal manner.”
TPVI offered a bid of P1.088 billion during the bidding of the Power Sector Assets and Liabilities Management (PSALM) Corp. in March 2014 wherein the right to top was known to the bidders.
SPC exercised its right to top and matched TPVI’s bid and paid an additional P54 million or a total of P1.143 billion to PSALM. Eventually, the Naga facility was awarded and turned over to SPC in September 2014.
In June 2014, Sergio Osmeña III filed a case with the Supreme Court against SPC and TVPI questioning the validity of the right to top, arguing that it is allegedly non-competitive.
“We urge PSALM, chaired by the Finance Department, to file its own motion for reconsideration as clearly, the decision is disadvantageous to the government at a time when government needs much-needed funds for employment and other basic services,” SPC said.
Validity upheld
In its Notice of Judgement dated Oct. 5, the High Court upheld the validity of the public bidding held by the PSALM of the Naga Power Plant, but invalidated the condition in the bidding granting SPC the right to top the bid.
The SC ordered the reinstatement of the Notice of Award issued by PSALM dated April 30, 2014 awarding the 153.1-MW Naga Power Plant in Cebu to TPVI.
The SC annulled and set aside the Asset Purchase Agreement (NPPC–APA) and the Land Lease Agreement executed (NPPC–LLA) between SPC and PSALM and directed PSALM to execute the NPPC-APA and the NPPC-LLA in favor of TPVI.
An official of AboitizPower, the Aboitiz group’s energy arm, earlier welcomed this development, saying this reinforces the company’s stand that the asset went through a fair bidding process.
TVPI is a subsidiary of AboitizPower.
PSALM held the first bidding for the Naga Power Plant in 2013.
The first two rounds were declared failed bids as only one bidder, SPC, showed up. TPVI joined the third round and won with a bid of P1.089 billion, higher than SPC’s bid of only P859 million.
SPC then exercised the right-to-top and was issued a Notice of Award by PSALM.