BIZ BUZZ: MGEN backs out of Semirara auction
The power generation arm of Manila Electric Co. (Meralco) will sit out the bidding for the Semirara coal site, with its top executive already tagging Semirara Mining and Power Corp. (SMPC) as the “logical winner.”
Emmanuel Rubio, Meralco PowerGen Corp. (MGEN) president and CEO, has opted to focus on a potential joint venture post-auction with the Consunji-led group.
For now, discussions are still ongoing between MGEN and DMCI Holdings, the parent firm of the country’s largest coal producer.
“We don’t have the time to do the due diligence. So, the discussion is, they’ll go ahead, they’ll bid. Now, if we see the offer to be acceptable and we see that there’s a business case for it, then we will discuss us coming in,” he told reporters.
“We’re not going to join the auction,” Rubio added.
In February this year, billionaire and Meralco chair Manuel V. Pangilinan expressed interest in joining the bidding for MGEN, which he said at the time could operate a mine-mouth project, a setup where a facility is developed near or beside a coal mine, allowing the direct transport of coal to the plant.
Rubio, who has been leading the stronger run of MGEN,—now accounting for almost half of Meralco’s core profit—dismissed any potential talks with other industry players, believing that SMPC has the best chance to regain a fresh coal contract with the government.
“They have all the equipment needed to extract coal in Semirara. The logical winner, with the rational bid, I think, is still Semirara,” he said.
SMPC’s 50-year deal will lapse in July 2027 after the Department of Justice junked its wish for a 13-year extension.
This prompted the Department of Energy to open the contract to other players. However, uncertainty mounts as the agency has deferred the bidding schedule.
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