Hopewell nets US$2b power plant contract
HOPEWELL Holdings has won the contract to build a US$2 billion coal-fired power plant in Sual province in northern Philippines, the country's biggest power project, Energy Secretary and National Power Corp (Napocor) chairman Delfin Lazaro said.
The basis of the bidding is the price at which the power generated from the project will be sold to Napocor by the winning contractor.
Other bidders were Philippine firm, First Private Power Corp (PFFC), the Tuntex group of Taiwan, and the Atlantic Gulf and Pacific Co (AG&P).
Mr Lazaro refused to divulge the respective bids of the other participants, but said that they were much higher than Hopewell's offer.
Hopewell was able to offer a price much lower than the prevailing rates, except that of geothermal-based power, because the coal that would be used in the operation of the plant would come from Napocor.
Power generated from fast-track plants, particularly the gas turbine plants, is sold at about two pesos per kilowatt/hour (about HK$0.55), while power generated through barges is priced at about 1.50 pesos to two pesos per kw/h.
The announcement of the bidding results signals the start of the negotiations between Napocor and Hopewell on the terms and conditions of the contract, including the operational period before the plant will be transferred to the Philippine Government.
Hopewell has already started talks with lending institutions to finance the project.
Hopwell's prospective US$2 billion investment in the plant makes it the biggest build-operate-transfer (BOT) participant in the country.
The Sual plant is Hopewell's sixth project in the Philippines. The others were the three gas turbine plants in Navotas, Manila, (which have a combined capacity of 210 megawatts), the rehabilitation of nine 30 MW power barges owned by Napocor, and the construction of the 700 MW Pagbilao coal thermal plant in Quezon. It has been estimated that the Pagbilao plant will cost US$933 million.
The rehabilitation of the power barges by Hopewell is also considered he first successful rehabilitate-operate-transfer (ROT) project in the power sector.