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Meralco’s $1.2 Billion USD Subic Power Facility picked 3 Hyundai’s - Korea lead bidder

The power generation subsidiary of Manila Electric Company (Meralco) has entered negotiation phase with South Korea's Hyundai Group for the engineering, procurement and construction (EPC) contract of its $1.2-billion Subic coal-fired power facility to be sited at the Subic Freeport zone in Zambales.

"We had three bidders… we are negotiating now with the lead bidder," Meralco executive vice president Aaron Domingo has disclosed in an exclusive interview.

While he did not name their chosen turnkey contractor, other parties privy to the negotiations have divulged that Meralco PowerGen is now in talks with the consortium of three Hyundai companies, namely Hyundai Engineering & Construction Co. Ltd. (HDEC) ; Hyundai Corporation and Hyundai Engineering Co. Ltd. (HEC)

Redondo Peninsula Energy Inc. will be the corporate vehicle for the 600-megawatt Subic coal-fired project. Meralco PowerGen will be the major stakeholder, in partnership with Aboitiz Group's Therma Power Inc. and Taiwan Cogeneration Corporation.

Domingo noted that they are still on track when it comes to the October target on the issuance of the environmental compliance certificate (ECC) for the second 300-MW unit of the facility. The ECC for the first unit of the same capacity was already issued earlier by the Department of Environment and Natural Resources (DENR).

 "We will be able to satisfy the requirements of the DENR. Actually, we're doing more than the requirements because there are also some requirements of stakeholders, like for us to conduct some studies," he stressed.

Despite the recent legal snag in the facility's implementation, Meralco PowerGen is eyeing that it can still move ahead with construction next year as the Supreme Court had not issued the temporary environmental protection order (TEPO) batted for by the parties which have been trying to stop the project.

"We need to issue the notice to proceed. We're targeting December … we will start mobilizing for construction early next year," Domingo said. Nevertheless, he indicated that the facility's commercial operation may already skid to 2016.

While project developers are already certain on financial closure as well as on the power supply agreement (PSA) for the project, the Meralco executive has emphasized that their focus now is resolving the other major concerns.

"There are only three main issues now, and those are not within our control and we would like to get the cooperation of everyone," he said.

These concerns will cover the ECC, interconnection issues with the National Grid Corporation of the Philippines (NGCP) and finalizing the documentation process for the land lease development agreement (LLDA) with the Subic Bay Metropolitan Authority.

For the concern with SBMA being its project host, Domingo has emphasized that "we already have the framework of agreement; we will just need to document it."

On grid interconnection issues, he noted that concerns are "being resolved already. Now, it's just a matter of agreeing on the technical parameters for the interconnection."

Manila Bulletin 

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