ENGINEER'S ROLE IN POWER PLANT ACQUISITION AND DIVESTMENT EXERCISES

Presented at: PowerGen Asia Conference, 22-24 September 1999, Singapore

Authored by:

Ir. Bob Chee

ABSTRACT: Engineers have diverse roles to play in power plant acquisition and divestment exercises. One of these roles is technical due diligence. Due diligence can be defined as an investigative program that enables the potential purchaser or seller to determine a value for the asset to be acquired or divested. This multi-disciplined task is usually done with the combined input from technical, legal, financial and tax professionals.

This paper describes the engineer's role in performing a due diligence exercise for the purpose of power plant acquisition or divestment. The engineer does not only carry out the technical aspects of due diligence, but also assist in all the necessary contract negotiations as well as formulating strategies on pricing. After reviewing and assessing the performance of the plant, the engineer's input is required for financial modelling based upon an operation and maintenance model. The investor who acts on the advice of the engineer can realise significant savings or avoid huge liabilities.

This paper draws upon the author's recent experience in undertaking due diligence work for the purchase of several power plant assets in Malaysia, India and China.

Note: If you want a copy of the complete Paper, please e-mail author at hk970701@hotmail.com

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