"We may opt to go into another round of bidding which is unlikely already or we may consider the proposal of some groups to defer the privatization of Transco and proceed with the sale of the generating assets," PSALM vice president Froilan Tampinco said.
According to Tampinco, they do not expect much problem in selling the initial batch of generating assets of the National Power Corp. (Napocor).
"I don’t think there would be problem with that (selling the generating assets ahead of the transmission assets). The investors’ concern would be to get good generating assets," he said.
Tampinco said other options may crop up in the negotiations with Singapore Power.
He said they may also seek proposals from their financial advisor, Credit Suisse First Boston (CSFB).
Tampinco said Transco will continue to operate the country’s transmission network should the deal with the sole bidder for these assets fail to push through.
"Transco may end up securing new loans to finance its capital investment to improve the transmission facilities," Tampinco said.
Based on the Transmission Development Plan (TDP) for the period 2002 to 2011, the country will need some P96.68 billion in capital for the improvement and modernization of the country’s transmission system. Of this amount, some P30.85 billion or 31.9 percent will be needed for projects up for implementation; P47.7 billion or 49.3 percent for future or indicative projects; and P18.13 billion or 18.8 percent for ongoing projects.
Privatizing the assets of Napocor is the only option left for the government to salvage a company buried deep in loans and losses.
PSALM, the entity mandated to handle Napocor’s privatization, said the proceeds from the sale will help plug the country’s consolidated public sector deficit as it is expected to provide an inflow of investments worth $4 billion to $5 billion. PSALM also said privatization will provide annual savings of about $500 million or P25 billion in financing charges.
On the sale of the generating assets, Tampinco said they have not yet decided if they would still group the assets before selling it.
"We have come up with initial groupings of the assets but it will still depend on the investors if they want to buy the power plants in groups or individually," he said.
The generating assets that are up for sale include Luzon Calaca (600 MW); Luzon Masinloc (600 MW); Luzon Angat (245 MW) composed of Pantabangan (100 MW), Masiway (12 MW), Ambuklao (75 MW), and Binga (100 MW); and Luzon Magat (360 MW).
The geothermal power plants that could be sold individually are: Bacon-Manito (150 MW); Palinpinon (193 MW); Tiwi Makban (685 MW); and Tongonan (113 MW).
Other individual power facilities for sale include: Sucat (400 MW); Loboc (1 MW); Amlan (1 MW); Palomo (4 MW); Agusan (2 MW); Navotas 1-3 (210 MW); Navotas 4 (100 MW); Bohol diesel (22 MW); Panay I (37 MW); diesel barges (142 MW); Iligan (98 MW); Pinamucan (105 MW).