DOE prepares for marketing roadshow for Napocor sale

The Department of Energy (DOE) is preparing for the pre-marketing roadshow abroad in line with the sale of the transmission assets of National Power Corp. (Napocor) in February next year.

Energy Secretary Vincent S. Perez said they would start with pre-selling in New York, coinciding with the World Economic Forum where President Arroyo and some Cabinet members, including Perez are expected to attend.

Perez said they expect to continue with the pre-marketing campaign of the transmission assets in the next couple of weeks after the economic forum.

"We will start the pre-marketing roadshow in that forum and two weeks thereafter we will undertake separate roadshow presentation in Europe, Asia and other parts of US," he said.

He said the financial advisors for Napocor is privatization, Credit Suisse First Boston and R.M. Rothschild and Sons, gathered that some of the investors are willing to have a "one-on-one meeting" instead of a group presentation. "We learned from our financial advisors that some interested parties prefer one-on-one talks," Perez said.

He expressed confidence they would be able to come up with the information memorandum of the transmission assets sale on January next year. "The information memo would be ready by January in time for the international roadshow in February," he said. The memo will carry vital details of the privatization.

The energy chief said they are on schedule regarding the implementation of the provisions of the Electric Power Industry Reform Act, particularly those relating to the sale of the transmission assets of the state-owned power generation firm.

"From our perspective, there is no delay in our schedule," he said, noting that for the past six months after the passage of the Power Bill, they had been busy preparing for the privatization of Napocor.

Under the EIRA, the Power Sector Assets and Liabilities Management Corp. (PSALM), created to manage the assets and liabilities of Napocor, should start disposing of Napocor’s assets 18 months after the passage of the bill.

Based on the privatization process proposed by the financial advisors, sale of National Transmission Co. (Transco), the company to be 100 percent-owned by PSALM that absorbs all the transmission assets of Napocor, will begin in the second quarter of next year almost simultaneously with the creation of the wholesale electric spot market.

After the sale of Transco, PSALM will privatize the generation assets of Napocor in the fourth quarter of 2002.

However, Perez admitted they still have to firm up what kind of privatization scheme to pursue.

Under the EIRA, PSALM is allowed to undertake two privatization options, either through concession contract or through outright sale.

If PSALM decides on a concession contract, it would be a 25-year contract renewable for another 25 years. Under this scheme, the concessionaire will finance, operate, expand, maintain and manage the Transco facilities.

The outright sale, on the other hand, calls for the direct selling of all transmission facilities, including grid interconnections and assets used for ancillary services.