The Power Sector Assets and Liabilities Management Corp. (PSALM) has rejected the new condition given by San Miguel Corp.’s (SMC) power unit, for its offer to fully pay in advance its monthly dues for the 1,200 megawatts Ilijan Power Plant, the Department of Finance (DOF) said yesterday.
In a statement, the DOF said Carlos Dominguez, finance secretary, asked PSALM for an update on South Premiere Power Corp.’s (SPPC) offer to fully settle in advance its monthly payments due under the Independent Power Producer Administrator (IPPA) agreement with PSALM for the Ilijan Power Plant.
Irene Besido Garcia, PSALM president and chief executive officer, said SPPC’s offer now carries with it a new condition that “entirely differs from the tenor of SPPC’s original offer.”
To recall, the DOF said SPPC publicly announced last year that it was willing to prepay these monthly payments to PSALM “without prejudice” to the pending case it has with the latter.
Garcia however reported that SPPC’s latest offer, which was outlined in a letter dated January 11, has the condition that PSALM should cede control and ownership of the Ilijan Power Plant to SPPC upon full settlement of the monthly payments, and ahead of the June 2022 date of turnover provided in the IPPA agreement.
According to Garcia, this new condition of SPPC was neither indicated in SPPC’s original offer letter to PSALM last year, nor mentioned during the July 2 meeting between representatives of SPPC and PSALM.
Based on PSALM’s data, the monthly payments due from SPPC for the period of January 2021 until June 2022 is about P14 billion.
PSALM has already sent a response to SPPC last January 18, Garcia said, pointing out that the agency’s acceptance of the prepayment offer under the new condition that it will “cede control and ownership of the Ilijan Power Station to SPPC” will “pre-empt any ruling of the judicial court on the matter and will undoubtedly prejudice PSALM’s legal position.”
In the same response, the agency reminded SPPC that in PSALM’s letter of August 4, it was categorically stated therein that “PSALM is willing to accept SPPC’s offer, provided that such acceptance is without prejudice to PSALM’s legal position” in the pending case.
The DOF said SPPC, a subsidiary of SMC Global Power Holdings Corp., still owes PSALM P23.07 billion in generation payments as of end-December 2020 per PSALM’s books. The computation of generation payments due PSALM from SPPC is the subject of the pending court case.
SPPC was appointed the IPPA for the Ilijan Power Plant in 2010.