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Property Profile Bauang Diesel Power Plant Land Located in Payocpoc Sur, Bauang, La Union

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Property Profile Bauang Diesel Power Plant Land Located in Payocpoc Sur, Bauang, La Union Republic of the Philippines Property Profile Bauang Diesel Power Plant Land Located in Payocpoc Sur, Bauang, La Union Privatization of the Real Estate Assets of PSALM 05 December 2017 IMPORTANT NOTICE This Property Profile (the “Profile”) has been prepared by Power Sector Assets and Liabilities Management Corporation (“PSALM) solely for information purposes. PSALM is distributing this Profile solely for use by Interested Parties to determine whether they would like to participate in the sale of the land with an aggregate area of 257,995 square meters more or less, including the land underlying the 215 MW Bauang Diesel Power Plant (BDPP) located at Payocpoc Sur, Bauang, La Union (the “Property”). The Profile may not be distributed, reproduced or used without the express written consent of PSALM for any purpose other than the evaluation of the Property by the person to whom this Profile has been delivered. The information contained herein has been prepared to assist Interested Parties in making their own evaluation of the Property and does not purport to contain all of the information that Interested Parties may desire. In all cases, Interested Parties should conduct their own investigation and analysis of the Property, their condition and prospects, and of the data set forth in this Profile. PSALM has not assumed any responsibility for independently verifying any of the information set forth herein, including any projections or statements about the prospects of the Property contained herein. PSALM does not make any representation or warranty as to the accuracy or completeness of this Profile or the information contained herein or any other written or oral communications transmitted to the recipient in the course of its evaluation of the Property. Only those particular representations and warranties, if any, which may be made to a party in a definitive written agreement regarding a transaction involving the Property, when, as and if executed, and subject to such limitations and restrictions as may be specified therein, will have any legal effect, and PSALM hereby disclaim all other representation and warranties. Neither the receipt of this Profile by any person nor any information contained herein or supplied herewith or subsequently communicated to any person in connection with a proposed transaction involving the Property is, or is to be, taken as constituting the giving of investment advice by PSALM to any such person. Each such person should make an independent assessment of the merits of pursuing a transaction involving the Property and should consult such person’s own professional advisors. PSALM may amend, supplement or replace any of the information contained in this Profile at any time, without giving prior notice or providing any reason. This Profile does not constitute a solicitation of bids for any transaction involving the Property. Bidding procedures are being distributed simultaneous with this Profile, and recipients may submit bids only in accordance with such procedures. Page 2 of 8 I. BACKGROUND ON THE PROPERTY The Property covers an aggregate land area of 257,995 square meters more or less, including the land underlying the 215 MW Baung Diesel Power Plant (BDPP). The Property is owned by National Power Corporation (NPC)/PSALM while the BDPP is owned by the Provincial Government of La Union (PGLU) and currently operated and maintained by 1590 Energy Corporation. The BDPP is a 215 MW diesel power plant constructed by First Private Power Corporation (FPPC) under a Build-Operate-Transfer (BOT) agreement with NPC. The BOT agreement was executed on January 11,1993 for a 15-year cooperation period reckoned from its commercial operation on July 25, 1995, or until July 25, 2010. The BOT agreement provided for the creation of the Bauang Private Power Corporation (BPPC) that will own, manage and operate the power plant, and assume and perform FPPC’s obligation. In July 2010, at the end of the term of the BOT contract, the BPPC turned over the BDPP to PSALM/NPC which turned over the same to the PGLU. The PGLU foreclosed the Bauang DPP assets consistent with the Supreme Court Decision G.R. No. 171470 dated 30 January 2009, and other legal proceedings due to NPC’s non-payment of real property taxes. Notwithstanding the forfeiture of BDPP, PSALM/NPC still owns the land underlying the BDPP. II. LOCATION AND DETAILS The Property is located at Bauang, La Union approximately 260 kilometers north of Manila, 5 kilometers from the Bauang town proper and 10 kilometers south of San Fernando, the capital town of La Union. It is bounded on the west by the South China Sea, and on the east by McArthur Highway. From the McArthur Highway, it is accessible via the 250-meter BPPC road. Poro point is located some 12 kilometers away, while beaches and resorts are within a few kilometers. Figures 1&2: Location map of the Property This Site Page 3 of 8 The land which is an interior lot, is irregular in shape, has a flat topography, graded and developed and its elevation is at level with the fronting road. Site improvements are present such as concrete drainages, concrete paved roads, fences, curbs and gutters. Water and power systems are installed. A 250-meter concrete-paved road (BPPC Road) with a width of 5 meters connects the Property to the McArthur Highway. The McArthur Highway, formerly the Manila North Road, is a two to six lane major highway in Northwestern Luzon connecting Metro Manila and La Union and it parallels the North Luzon Expressway (NLEX). Figure 3: The BPPC road is the access to the Property from the McArthur Highway Page 4 of 8 Figure 4: The Property The Property consists of ninety-two (92) lots, four (4) lots of which are titled in the name of NPC while the other lots are still in the process of titling and registration pending at the Land Registration Authority (LRA). One (1) lot is a leased public land being leased by NPC from DENR since June 2005 until June 2030, and is excluded from the sale. The technical descriptions, specific lot details and titling status are shown in Annex “A”, while copies of Transfer Certificates of Title and Tax Declarations are attached as Annexes “B” and “C” respectively. III. NEIGHBORHOOD AND UTILITIES Bauang is generally an agricultural municipality wherein a significant portion of the population derives their income principally from farming. 60% of the total land area serves as agricultural production areas. However, lowland agricultural areas have been dwindling over the years due to conversion. There is a very significant share of business activities like trading and services. Manufacturing has the smallest contribution with small to medium sized rice mills, furniture shops and bakeries. The Bauang Beach, which is characterized with fine grayish sand beach, is the major drawing tourist appeal of the area extending from Barangay Pagdalagan Sur to Barangay Baccuit. Several beach resorts continually dotted the shoreline with tourist accommodation facilities. The streets in the neighborhood are designed to carry light to heavy vehicular and pedestrian traffic loads. Major thoroughfares are concreted with widths ranging from Page 5 of 8 5-8 meters. Land transportation services are readily available with the presence of public utility vehicles such as buses, jeepneys and tricycles. Water supply for residential & commercial purposes is available thru the Metro La Union Water District (MLUWD) and several water station establishments. Bauang is 100% energized by Electricity through La Union Electric Cooperative, Inc. (LUELCO) and La Union Electric Company (LUECO). Internet and telephone/mobile services providers in the municipality are Globe, Smart, Sun and PLDT with cell sites located in 7 barangays. Some of the important improvements and developments in the vicinity are: 1. Payocpoc Elementary School 2. Santiago Elementary School 3. Payocpoc Police Community Precinct 4. St. Joseph the Worker Parish 5. Bauang Hills Subdivision Figure 5: The neighborhood where the Property is located IV. ZONING AND LAND USE The Property, which is an improved land, is classified and assessed for Industrial Use (actual use) though it is in an area where land is utilized mainly for agriculture and residential development. Based on the existing Comprehensive Land Use Plan (CLUP, 2016-2025) for the Municipality of Bauang, the Property falls within the Industrial Class, and surrounding the Property are mostly for agricultural use. In the proposed CLUP, the Property is still within the Industrial Zone but the immediate area is reclassified as mostly for residential use (Annex “D”). Page 6 of 8 V. GOVERNMENT VALUATION/ASSESSMENT A. BIR Zonal Valuation The existing BIR Zonal Value of Real Property in Payocpoc Sur, Bauang, La Union per Department Order No. 3-07, effective 2 May 2007, provides: Figure 6: BIR Zonal Assessment The above did not include assessment for Industrial Areas. However, pursuant to the proposed 2008 new schedule for Urban Lands, urban lands classified under Industrial type has unit values ranging from Php600 to Php900 per square meter. Page 7 of 8 Figure 6: Proposed 2008 New Schedule of Assessment B. Local Assessment The Property is currently assessed as an Industrial lot, with an assessment unit value of Php900.00 per square meter by the Bauang Municipal Assessor. PSALM paid a total amount of PhP297,907.36 to the Provincial Government of La Union representing payment for the Real Property Tax for CY 2017 (See Annex “E” for the copies of O.R. paid for RPT) Page 8 of 8 .
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