Trail of Power Mess Leads to Ramos

Name of Plant :	205.6 MW Naga Power Plant Complex (A20)
Name of IPP :	Salcon Power Corporation
Contract Type :	Rehabilitate-Operate-Maintain/Energy Conversion Agreement/Solicited
Status of Plant :	Gas Turbines and Diesel Plants in Economic Shutdown
Cooperation Period :	15 years (March 15, 1994 - March 15, 2009)

Nature of Issue	Issue	Recommendation
Non-economical dispatch	The gas turbines and diesel plants of the Naga Power Plant Complex have been on economic shutdown as running them is more expensive, in terms of variable cost, than the geothermal plants of Leyte.	PSALM to study possible termination of contract

Claims settlement	NPC and Salcon have monetary claims against each other. One of which is an estimated PhP 400 million claim against NPC.	The government has more than PhP 400 million at stake. Utmost attention must be taken to ensure that the claim is settled properly and at the least cost to the government.

	This claim is composed of a refund on penalties and a claim for testing bonus.