2 multinationals cancel investment plans in RP

Two multinational corporations which have earlier expressed interest in investing in the country's energy sector have closed shop reportedly in frustration over the non-passage of the energy reform bill.

Industry sources said Power Generation of the United Kingdom (PowerGen PLC) and the National Power PLC of the UK pulled out their overseas office in the country after Congress failed to pass the Comprehensive Electricity Industry Reform Bill last year. It is also the perception of the two firms' officers that the bill may not be passed during Congress' regular session this year.

PowerGen is one of the global players in power generations. It reported an output of 56,100-megawatts (MW) with a pre-tax profit of 580 million pounds in the first quarter of 1998 alone. It has extensive experience both in the UK and overseas in the development and utilization of electricity and gas power. It has projects in Australia, Hungary, Germany, India, Portugal, Indonesia and Thailand.

It was involved in the bidding process for the 40-percent equity share of First Power Generation Inc. (First Gen) of the Lopez conglomerate. However, they decided to pull out of the bidding process and Union Fenosa of Spain ultimately won.

It was also involved in the bidding for the construction and equipment of the 1,200-MW Ilijan gas-fired power plant in Batangas City.

National Power PLC was one of the first multinationals to officially declare their interest in acquiring assets of a "privatized" Napocor. Other firms that followed suit were PowerGen, Bechtel Overseas Corp., Electricite de France, Asea Brown Boveri, California Energy International, Mission Energy, Enron Power, and Raytheon Engineering and Construction Corp.

"We are here to observe the energy privatization program of the Philippine government," Stephen Mitchell, PowerGen development manager told newsmen in earlier interviews.

Mitchell said they are keenly watching the passage of the electricity bill and the privatization of the National Power Corp. (Napocor).

Mitchell said they remain interested in the Philippine market although the over-capacity situation and inefficiency levels of some government-run power plants are a "turn-off" for foreign investors.