Aboitiz-led Subic Enerzone sets P100-M capex

Subic Enerzone Corp., a power distribution utility run by the Aboitiz group, has earmarked some P100 million for its capital expenditure for this year.

The bulk of the budget will be used to maintain and upgrade the power distribution system of the Subic Bay Metropolitan Authority (SBMA).

Aboitiz Equity Ventures (AEV) chief operating officer Erramon Aboitiz said the amount will specifically be used to finance the improvement of existing lines and maintaining the reliability of power at the SBMA.

AEV, in tandem with its subsidiary Davao Light and Power Corp. won the contract last year to operate the power distribution system at SBMA.

"We just hooked in at SBMA. We started last October. We will start our capex program soon," Aboitiz said.

In October last year, the consortium assumed operations at the freeport following the issuance of a notice to proceed by the SBMA.

The group entered into a distribution management service agreement (DMSA) for the privatization of the SBMA power distribution system on rehabilitate-operate-transfer agreement.

Under the DMSA, the group is required to invest P368 million within the next five years to rehabilitate the existing power distribution system and reduce its systems loss to 9.5 percent from the previous 14.1 percent.

The SBMA, on the other hand, will receive an annual income of P40 million.

Aboitiz said he is optimistic that their new venture would result in an increase in sales this year. Growth of electricity sales at the SBMA has been flat in 2003, he said.

The Aboitiz group’s entry at the SBMA brought down electricity rates to P3.90 per kilowatthour (kwh). Prior to this, SBMA charges P4.49 per kwh, slightly higher than the rate being charged by the Clark Special Economic Zone at P4.94 per kwh.