Under the law, PSALM will be in charge of the privatization of Napocor’s assets and liabilities.
CBK Power, the operator of the $470-million build-rehabilitate-operate-transfer (BROT) Caliraya-Botocan-Kalayaan hydropower plant in Laguna, is a joint venture between Industrias Metallurgicas Percarmona S.A. (IMPSA) of Argentina and Edison Mission Energy of California.
"We have looked at some of the assets but we are still uncommitted," CBK Power president and chief executive officer Gerald Katz said.
The CBK executive, however, admitted that the company prefers putting up new power plants rather than acquiring the Napocor assets.
"Though we are looking at both options of buying and developing power facilities in the country, we believe it would be better for us if we will just be developing new (greenfield) power plants rather than purchase existing ones," he said.
Katz also reiterated CBK’s firm commitment to invest in the Philippines. "There are a lot of investment opportunities here," he said.
But Katz said due to the prevailing political uncertainties related to the May elections, "we have to wait and see what will happen".
In 1998, CBK Power clinched the BROT project but it took the company several years before it could start the project because of the controversies it encountered with the government.
However, these controversies did not stop CBK Power from considering the Philippines as an investment site.
Last year, the government successfully renegotiated its contract with CBK Power resulting to a savings of $96 million or approximately P5 billion.
The savings from the global settlement includes CBK Power’s concession to waive its right to collect from Napocor the last four installments, amounting to $26 million, due on the security deposit.
The $70-million security deposit was effectively an interest-free loan which CBK Power extended to Napocor.
Under the agreement, CBK Power agreed to waive part of its claims for capital recovery fees as well as the operation and maintenance fees on Kalayaan Stage II until Dec. 2003.
CBK Power, on the other hand, agreed to provide Napocor free of charge for any electricity delivered above the minimum guaranteed power for a period of 30 months. The agreement is subject to consent of CBK Power’s lenders.
The CBK complex in Laguna is considered a critical and indispensable component of the Luzon grid. Given its start-up capability, the CBK pumped-storage power plant can help reduce occurrences of prolonged power blackouts.