10 firms bid for contract to distribute power in Subic

There are at least 10 firms that have indicted interest in bidding for the contract to distribute power in the Subic Freeport.

Subic Bay Metropolitan Authority (SBMA) chairman Felicito Payumo said yesterday that eight foreign and two local companies purchased tender documents for the privatization of the SBMA power distribution system.

The list of purchasers, Payumo disclosed, include Aboitiz Power Corp., Mirant Philippines Corp. Miescor Builders Inc., MCA Power Corp., Philippine Power Distributors Investment Corp., Harty Inc. Phil./Meiden (Singapore), Obias, Ramos, Ramos & Consunji, Pargum Consolidated, Alstom T&D, and Mactan Electric Co., Inc.

The interested bidders would takeover the power distribution system in the freeport through a build-operate-transfer (BOT) scheme valid over a 20-year period.

A pre-bidding conference is set on Jan. 18, 2003, but the actual bidding would be held sometime in February, Payumo said.

Payumo explained that the SBMA Board decided to privatize the freeport’s power distribution system so that the work would be done more efficiently by a private firm.

Learning from its previous mistake in the water sector, Payumo said that the SBMA now wants potential and interested bidders to prove that they can lower the cost of electricity in the freeport.

"The most important thing in their tenders is by how much they can lower the cost of electricity in the freeport," Payumo said.

The current cost of power in the freeport, Payumo said, is around P4.15 per kilowatt hour.

The P4.15 per kilowatt hour rate, Payumo explained, is broken down to the P3.15 per kilowatt hour charged by the National Power Corp., plus a P1 per kilowatt hour additional charge for distribution.

The SBMA estimates that it would be able to save around P350 million by privatizing the power distribution system in the freeport.

The P350 million is the estimated outlay of the government for the distribution infrastructure needed and maintenance of the power system in Subic.

The estimate also includes the uncollected accounts, bad debts and system loss of the existing system.

"Let’s face it," Payumo admitted, "the private sector is more efficient in running this business."

The SBMA, Payumo said, is able to collect only between P50 million to P60 million a month from power users in the freeport.

The current electricity consumption in the freeport is around 32 megawatts a month.

However, Payumo said, studies show that power demand in the freeport is expected to grow between five to 10 percent in the next 10 years.