Manila Thermal plant scrap sold for $2.5M

By Riza Recio

04/26/2008

State power assets holding firm Power Sector Assets and Liabilities Management Corp. (Psalm) said yesterday it completed a negotiated sale with Gagasan Steel Inc. for the decommissioned Manila Thermal Power Plant (MTPP) worth $2.5 million.

Psalm, which is tasked to sell generating assets of state firm National Power Corp. (Napocor) said the sale consisted of the plant’s equipment, components, auxiliaries, and accessories.

The technical working group reviewed the negotiating documents submitted by Gagasan Steel and found them fully compliant with all requirements, subject to verification of the authenticity and veracity of the submissions, according to Psalm.

Gagasan Steel is an affiliate of Malaysia-based Gagasan Steel Sdn Berhad. It deals and trades scrap metals and has been in operation since 2002. Its local clients include Napocor and the Manila Electric Co.

Under the terms of the sale, Gagasan Steel will be responsible for the dismantling of the plant equipment and environmental cleanup.

Psalm decided to conduct negotiations with Gagasan Steel after it failed to bid out three times the motballed plant, with the last failed bid held last Feb. 6.

Gagasan Steel was the only bidder to pass the technical qualifications, but the firm fell short of the reserve price.

The first two bids for the MTPP, held in the first quarter of 2005 and the first quarter of 2007, also failed primarily due to lack of investor interest.

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