Transco says IMPSA contract valid

The National Transmission Co. (Transco) said yesterday it would continue to pay the capital recovery fee to CBK Power Co., a joint venture between IMPSA and Edison Mission of the US, as it considered the CBK build-rehabilitate-operate-transfer (BROT) project as "valid".

"As far as we are concerned, there is nothing wrong with the (CBK) project. It has gone through years of review. From my own perspective, I think, the contract has a reasonable price," Transco president Asisclo Gonzaga said in an interview.

Gonzaga said the rehabilitation of the CBK plant in Laguna "is doing fine. There is nothing wrong with the implementation of the project."

The Department of Energy (DOE) had temporarily withheld payments to IMPSA, the project contractor. The department then commissioned Meritec Ltd. of Auckland, New Zealand, an independent foreign consultancy firm, to conduct a third-party project audit on CBK.

In the report, Meritec said it found no valid reason to withhold payment of overdue accounts that CBK Power is trying to collect from Napocor and recommended payment as soon as possible to avoid default and cross defaults.

Based on the result of the report upholding the decision to award the certificate of completion (CoC), Napocor started paying capital recovery fee to CBK Power amounting to about $5 million or P255 million.

The Meritec report found that the acceptance and commissioning of Kalayaan Unit 1 were met except for some range and load response features which were deemed to have little effect on system operations. "The operational availability of Kalayaan units since these were rehabilitated by CBK Power has been in excess of specified requirements for both maintenance and forced outages. The acceptance test and commissioning records indicate that the Unit of Kalayaan has met or has exceeded the operating criteria," the report said.

Today, Units 1 and 2 of Kalayaan are each able to run at over 180 megawatts (MW), an improvement over their rated capacities of 150 MW prior to the rehabilitation by IMPSA. The CBK-BROT contract stipulates that the rehabilitation should increase the capability of both units to at least 177 MW.

The Meritec report shows that CBK Power has put in more than $350 million into the project and paid $70.82 million in security deposit.