TEVES SEES DELAY IN PROCEEDS FROM SALE OF NAPOCOR ASSETS
MANILA, July 21, 2005 (STAR) By Donnabelle L. Gatdula - Finance Secretary Margarito Teves has recognized the possible delay in realizing proceeds from the privatization of the National Power Corp.ís transmission assets.
"The privatization of the Napocor (transmission) assets will take more than three months. It will take a longer time so we do not include it yet in our projected budget computation (for 2005)," Teves said, when asked if the National Government has factored in the expected proceeds in the projected budget deficit this year.
The government expects to raise some $2 billion from the sale of the generation assets and some $2.5 billion to $3 billion from concession agreements of the transmission assets.
Based on the earlier plan, the bidding for Napocorís transmission assets will be held in October this year. By end-2005, it is expected that the government, through the Power Sector Assets and Liabilities Management Corp. (PSALM), would have sold some 70 percent of the generating assets of the state-owned power firm.
Teves, who assumed office early this week, said he would need time to review the privatization scheme of Napocor. "I still have to study our privatization moves," he said.
Proceeds from sale of the Napocor assets are expected to help bridge the widening budget gap of the government. This year, the Department of Finance (DOF) is projecting the budget deficit to reach P180 billion.
The National Government has been shouldering the interest payments of Napocorís debts. For the first three months of 2005, NGís total expenditures reached P236.1 billion, higher than the P209.5 billion in the same period in 2004. The increase was attributed to the assumption of NG of Napocorís debt amounting to P200 billion.
PSALM, the government agency tasked to undertake the privatization of the countryís electricity industry, bid out early this month the 600-MW Calaca coal-fired plant. But without a transition supply contract (TSC) that ensures a ready market for its electricity, the prospective bidders pulled out, forcing PSALM to cancel the bidding.
But PSALM officials reported that after the cancelled bid, investors, including foreign companies, expressed renewed interest in bidding for Calaca even if it does not have a supply contract as originally envisioned.
The government began privatizing state-owned power plants in March 2004 as part of the restructuring of the power sector. PSALM has since successfully bid out six power plants, five of which are hydropower. These are Talomo in Davao, the 1.6-MW Agusan plant in Bukidnon, the 1.8-MW Barit plant in Camarines Sur, the 0.4-MW Cawayan plant in Sorsogon, and the 1.2-MW Loboc plant in Bohol. Proceeds from the sale of these hydropower plants amounted to $5.2 million.
PSALM also bid out the 600-MW coal-fired Masinloc plant in Zambales with the winning bid amounting to $561.7 million. Total proceeds from the successful sale of the six plants amounted to $566.9 million, or about P31.75 billion, which will be used to settle a portion of the debts of the Napocor.
It is set to privatize seven more hydropower plants. These are the 12-MW Masiway plant, the 100-MW Pantabangan plant, the 360-MW Magat plant, the 75-MW Ambuklao plant, the 100-MW Binga plant, the 246-MW Angat plant, and the 0.8-MW Amlan plant.
Reported by: Sol Jose Vanzi
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