The group, made up of the Electricity Generating Authority of Thailand (EGAT) and local investors led by former Transco president and National Power Corp. (Napocor) chief operating officer Asisclo Gonzaga, said government’s claim that they had to terminate negotiations with four prospective investors "because the bids they received were unique and complex, is unacceptable."
Energy Secretary Vincent Perez on Tuesday announced that the Power Sector Assets and Liabilities Management Corp. (PSALM), the state entity tasked to oversee the privatization of Napocor’s generating and transmission assets, has decided to revert back to a public bidding from a negotiated agreement for the concession to operate Transco over a 25-year period.
Gonzaga said they were informed last Friday that some clarifications have to be made with respect to their bids. There was no meeting among the bidders and instead the questions were sent through e-mail and given until Wednesday afternoon to reply.
"Then they announced by Tuesday afternoon, even before our deadline was up, that they have terminated the talks because they cannot understand our bids," Gonzaga said. "There was no transparency in the whole exercise," he added.
Gonzaga said due to this dilly-dallying, the EGAT-led consortium would now have to further review its plan to participate in the public bidding
"I still don’t know yet. Our Thai partners have yet to decide on this. I will be informed by them soon. They already know the situation and they were very disappointed," said Gonzaga.
He said they would also demand government for a meeting to discuss in detail why the latter failed to be transparent on its decision to change the bidding process.
"Transparency is what we demand. They should explain why. What are the valuations on certain parameters. They should issue a clarification. We don’t mind if we lose but what we demand is transparency," Gonzaga said.
"We offered not only the best possible price of $3.4 billion given certain conditions but also a public offering to ensure a broadened ownership base of what could be the country’s biggest privatization effort," he added.
"Like the three other bidders, we devoted a lot of resources, time, and effort to come out with an offer which we feel will give a fair return not only on our projected investment but also to the government as well as to the Filipino people," Gonzaga said.
He said aside from the EGAT-led consortium, the three other bidders for Transco likewise could not comprehend why the government branded the bid terms as "highly unique and complex."
"While they may be complex, we do not believe they are beyond analysis. And we do not believe those conducting the technical evaluations are incompetent. Obviously, they have their own personal agenda to protect," said Gonzaga.
"This administration should take into consideration how knee-jerk decisions such as what Secretary Perez just announced could adversely affect the country’s image among foreign investors. We are just turning out to be a laughing stock in the international community," Gonzaga said.
Based on the financial proposals received last week, Transco fetched indicative offers from the four pre-qualified groups of between $1.9 billion to $3.4 billion.
The other groups reportedly interested in Transco include the consortium of food and beverage conglomerate San Miguel Corp.
and Tokyo Electric; Hydro Quebéc and the Delgados’ Transnational Diversified Group; and Metro Pacific Corp. and Australia’s Trans-Grid.