Naga Thermal Power Plant

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Salcon Power Corp. of Singapore won the contract to rehabilitate the 206-MW Naga Thermal Power Plant owned by the state-owned national power corp., Napocor in 1993. Following rehabilitation, Salcon was to manage and operate the plant. The plant supplied electricity to the povince of Cebu. Napocor was responsible for fuel supply. In October of 2003, Napocor announced that it wanted to buy out the contract of Salcon Power Corp. to operate the land-based gas turbines at the Naga power plant complex in Cebu. Napocor also sought to renegotiate its PPA with Salcon. Salcon said the contract buy-out is limited only to the two gas turbine units and not the entire 203.8-MW power plant units comprising the Naga Power Plant Complex in the central Philippines. In exchange, an extension of Salcon's 15-year concession contract was being considered. Feb. 2005 - MANILA (Dow Jones)--Salcon Power Corp. (SPC.PH) Tuesday said the government has approved the Philippine company's deal with state utility National Power Corp. (NAP.YY), or Napocor, to extend Salcon's contract to operate a power generation complex in central Philippines. Salcon, a Philippine power producer, said the Cabinet group that reviews large public contracts has approved the extension of the company's 15-year deal with Napocor to operate the Naga power complex. The deal will be extended by 34 months from the scheduled expiry date of May 29, 2009. Under the agreement, Napocor will also buy out a portion of Salcon's contract covering the land-based gas turbines with a total capacity of 54 megawatts. The gas turbines are part of the 203.8 MW Naga complex, but are too costly to operate and are currently used sparingly. In exchange, Salcon will reduce by 20% the minimum amount of electricity that Napocor has to buy from the Naga complex, which is estimated to save Napocor PHP3 billion a year. Salcon will also have to pay the PHP11.7 million that Napocor was required to set aside for electricity projects in communities that host power stations.