Keen at joining the re-bidding for the appointment of Independent Power Producer Administrators (IPPAs) for the Sual and Pagbilao coal plants, Aboitiz Power Corporation (AP) hinted that it may need to reassess its offers to finally top the reserve price set by the government for the power contracts.

“Yes, we are very much interested to join the rebidding,” AP president and chief executive officer Erramon I. Aboitiz said.

Asked what will possibly change in their bidding strategy to finally corner the IPPA deal for any of the two plants, Aboitiz’s curt answer was: “We will review our pricing.”

In the last bidding for the IPPAs, Aboitiz Power had only one competitor in San Miguel Corporation. The process though ended with government failing to award the IPPA deals due to “unmet reserve price.”

AP senior vice president Luis Miguel Aboitiz explained that bidders were given a spreadsheet in which they were required to input their price, and that shall determine who will eventually be declared as the winning bidder.

“Basically, we determine our bid subject to certain limitations. The limitations would include how low your prices can be, and how much you can put at the back end, something like that,” he noted.

The spreadsheet, it was further noted, also contain a cautionary provision stating that the IPPA shall be warned on violations being committed on the terms of the deal.

The Power Sector Assets and Liabilities Management Corporation (PSALM) schedules the IPPA re-auction process for the Sual and Pagbilao plants by August 28 this year. Due diligence started July 23 while pre-bid conference is scheduled August 5.

In this round, the privatization company stated that if the process ends in another failed bidding, it shall already “enter into negotiations in accordance with PSALM’s negotiation procedures,” based on the terms set in the bidding package.

PSALM, in its tender notice, indicated that it will employ a two-envelope bidding system, and interested parties must post a bid security of $7.0 million in the form of irrevocable letter of credit acceptable to the committee.

Interested parties are required to submit a bid for both of Sual and Pagbilao plants, and a bidder can only be declared winning one of the plants’ IPPA portfolio.

“If the bidder is the highest bidder for both the Pagbilao IPPA and Sual IPPA, the Committee will select which one to award to the bidder,” PSALM said.