Transco president Asisclo T. Gonzaga said this year’s capex will be financed by the budget approved under the General Appropriations Act (GAA). The Congress last October approved a P232-million budget for Napocor in 2002.
It is mandated under EIRA that the government will have to privatize the debt-ridden Napocor which incurred a net loss of P12.9 billion in 2000.
Under the privatization plan, all transmission assets of Napocor will be transferred to Transco, which will be supervised by another new entity, Power Sector Assets and Liabilities Management Corp. (PSALM) which was created to absorb all the assets and liabilities of Napocor.
The capex budget for 2002 will be used to finance ongoing projects such as the rehabilitation and upgrading of existing transmission lines of Napocor.
Transco is scheduled to be privatized within the first half of this year. A pre-marketing campaign was recently conducted by an economic team led by Energy Secretary Vincent S. Perez in New York and London.
The government expects to raise about $1.5 billion from the sale of Transco. But the PSALM estimated that the proceeds could go as high as $2.4 billion to $2.7 billion.
After the privatization of Transco, the new owner will be responsibile for infusing fresh capital for the modernization and upgrading of the existing transmission lines.
It was estimated that the winning bidder for Transco will have to pour in some $1 billion for the modernization of the transmission lines over the next four years or about $250 million each year.