Indonesia offers cheaper coal to Phillipines' Napocor

Several Indonesian firms, through the Indonesian Coal Mining Association (ICMA), have offered to supply the coal requirements of the National Power Corporation (NPC) at a rate which is lower by 10 percent than the prevailing market price.

A memorandum of understanding (MOU) was sealed between ICMA and NPC during the recent state visit of President Arroyo in Indonesia, for a proposed coal supply deal.

Energy Secretary and NPC board vice chairman Vincent S. Perez clarified that the MOU signed does not extend any special privilege to the Indonesian mining firms, on supplying the coal requirements of the power firm.

"The agreement would provide ICMA with a guaranteed market for coal?while giving chance to reduce the cost of NPC," he said.

He pointed out the government remains committed to its earlier pronouncement that all coal procurements of NPC would be done on a competitive bidding.

The Arroyo administration has made as a mandate that it would not enter into negotiated deals, especially on supply and equipments procurement, unless there are no alternatives available.

Recently, NPC adopted the electronic bidding (e-bidding) in securing the coal supply of its power plants.

NPC president Jesus N. Alcordo said the e-bidding had shorten the power firm's procurement process, and more transparency in the supply procurement has been effected. Cost savings were also realized by NPC in its new mode of securing coal supply.

The state-run power firm earlier planned of cornering longterm supply contracts for its coal requirements, possibly stretching over a 3-year period. (*)