Despite losses, Meralco keen on sub-transmission assets

The Manila Electric Co. (Meralco) will buy the sub-transmission assets (STAs) of the National Transmission Corp. (Transco), a ranking Meralco official said over the weekend.

"We have already included it (purchase of STAs) in our capital expenditure budget," Meralco president Jesus Francisco said.

Francisco said they have already informed Transco of their intention to buy some of its STAs but on a deferred payment basis.

"We told them we will buy but we expect to stretch the payment for several years," he said.

The Meralco executive said they have already identified the STAs that they would purchase.

"Our priority would be those STAs located in Cavite, Bulacan and Batangas. But our emphasis is more on Cavite STAs," Francisco said.

Meralco is set to spend about P5.7 billion for its capex in 2005 as prescribed by its creditors in compliance with a refinancing agreement last November.

In 2004, the company set aside only P5.3 billion for its capex budget, this is 17.3 percent lower than the P6.4 billion capex level in 2003.

Of the more than P5 billion STAs to be sold by Transco, bulk or about P4 billion are within the franchise areas of Meralco.

Under Republic Act 9136 or Electric Power Industry Reform Act of 2001, Transco is mandated to sell its STAs or those assets with capacity of 69 kilovolt (kV) and below, the distribution utilities and electric cooperatives.

Transco has offered the said assets to electric cooperatives via the lease purchase financing program.