PSALM president Edgardo del Fonso said the more than two-week extension will allow other firms which have been expressing their interest to participate in the privatization but were not able to beat the deadline. "They inform us that they intend to join the bidding but they will need more time because they have some clarifications on the bidding structure," he said.
According to the PSALM chief, the extension will not affect the overall schedule of the privatization process. "We will be able to meet the mid-July deadline to award the contract to a winning concessionaire," he said.
He said PSALM has already issued an information memorandum which provides detailed information about Transco and other bidding documents to interested parties.
As approved by President Arroyo, the Transco privatization will be carried out in two phases.
In phase one, PSALM will award a concession to operate, maintain, rehabilitate, expand and finance the nationwide high voltage transmission grid in favor of the concessionaire. Until the concessionaire obtains from Congress a franchise to operate as public utility, Transco and the concessionaire will suspend the provisions of the concession agreement relating to functions requiring a franchise, such as systems operation.
Transco will continue to perform these functions while the concessionaire, with the assistance of appropriate government agencies, applies for a franchise.
Phase two starts when Congress approves a franchise in favor of the concessionaire. At that point, the concessionaire shall take over as the grid operate and run the entire transmission system.
Del Fonso said the timetable for the privatization of Transco will cover a period of about six months, including the period required for due diligence. At the time of the bidding, qualified bidders will have signed a common set of pre-agreed contracts and will need to submit only its price offer, to ensure maximum transparency, eliminate the need for any post-bidding negotiations and expedite the closing of the transaction. – Donnabelle Gatdula