Regional Coal: Chinese firm to supply coal to Philippines?s Napocor

State-owned National Power Corp. (Napocor) is expected to award next month to the Shanxi Import/Export Group Co. of China the contract to supply 325,000 metric tons (MT) of coal to the Sual coal-fired power plant in Batangas, The Philippine Star reported Friday.

The report said Shanxi has submitted the lowest tender during the electronic bidding, edging out two other Chinese suppliers ? Shenua Coal Trading Co. and China National Coal Import/Export Group Co.

Based on official bidding results released by the Napocor?s Bids and Contracts Services Department, Shanxi?s bid was $26.44 per metric ton (MT) freight on board (FOB) and $5/MT for freight costs, for a levelized cost of $31.4448/MT.

Shenua placed second with a bid of $25.05/MT plus $6/MT for freight costs, for a levelized cost of $31.5091/MT. At a distant third was China National, whose tender was placed at a levelized cost of $32.5529, consisting of $27/MT and $5.10 MT for freight costs.

Shanxi?s bid is now undergoing post-evaluation by Napocor?s Contracts Awards Committee, and will be subject to the approval of the Napocor board. The nine-man board is expected to hold its next regular meeting on July 30.

Under the electronic process, Napocor allows qualified bidders to submit their tenders on-line and then ranks these bids using the "reverse auction" method.

Specifically, all technically-complying bidders are given individual computer terminals inside the Napocor e-bidding room where they can key in their price bids, and at the same time monitor the lowest levelized bid without knowing which of the other bidders submitted this.

Napocor employed the e-bidding system beginning 2001 to streamline its bidding process and at the same time give it greater transparency. The method has also enabled it to receive more competitive offers for the contracts that it regularly bids out. (*)