"This could be a more reasonable target. We have to do this so as not to disappoint investors," chief economic strategist and former Representative of Albay Joey Salceda said.
Salceda said the Transco privatization is part of the overall economic development package being pushed by the Arroyo team.
"Privatization is part of the collective efforts of the government. The executive will try to deliver on taxes, some should also deliver their privatization effort," he said.
According to Salceda, there are some factors that need to be addressed before the privatization of Transco pushes through. "We need to get creditors’ consent," he said.
One of the multilateral creditors of Transco, he said, even wants some environmental issues resolved before giving its consent on the Transco privatization.
Transco president Alan T. Ortiz, in a separate interview, said they have completed the new terms of reference (TOR) for the proposed public bidding scheme of Transco.
Former Energy Secretary Vincent S. Perez has said, before he stepped down of his office last month, that PSALM is trying its best to privatize Transco by July this year.
The TOR is expected to continue to carry previous terms such as that the winning concessionaire should have technical and financial capabilities in running a transmission company; and should conform with the 60-40 percent foreign ownership limit.
It would be recalled that PSALM has to come up with a new set of sale guidelines when it decided to shift from negotiated sale to a public bidding as a form of privatization scheme for the country’s largest transmission highway.
The National Government aims to raise about $2 billion to $2.5 billion from the privatization of Transco.
On the generating assets of the National Power Corp., PSALM hopes to sell 70 percent of these assets in Luzon and Visayas by end-2005.
PSALM is also proposing some changes in the rules of genco privatization.
There was a proposal to increase the upfront cash to be given by the winning bidder of the Napocor assets to 50 percent from current level of 40 percent.
There was also a proposal for the winning bidders of gencos to pay in cash if the power plants have 150 MW capacity and below.
PSALM has also set technical and financial qualifications for the future bidders of the Napocor assets. The bidders must have experience in operating generating assets and if no experience, must secure services of generating asset operator or personnel.
It would also require a minimum net asset or market capitalization depending on the size of the asset to be acquired.
PSALM will also allow the investors to undertake a preliminary asset review (PAR) to accelerate the overall sale process of the generating assets of Napocor.
The proposed strategies aims to bring assets to market as quickly as possible in order to capitalize on positive buyer sentiment and under a plan that maximizes value within PSALM’s procedure and limitations for fair and transparent auctions.
PSALM said it will also arrange auction of assets in blocks such that each block is represented by different fuel type to maximize bidder universe.
Based on the proposed ideal blocks for bidding, PSALM will sell as Block 1 - 600 MW Calaca (coal), 12 MW Masiway (hydro), 100 MW Pantabangan (hydro), and 150 MW Bacman (geothermal).Block 2 is composed of 620-MW Limay plus site (diesel); 360 MW Magat (hydro), 685 MW Tiwi-Makban (geothermal).Block 3, on the other hand, will compose of 850 MW Sucat (bunker), 310 MW Navotas I and II (diesel), 193 MW Palinpinon (geothermal), 175 MW Ambuklao and Binga (hydro).
Block 4, meanwhile, will consist of 246 MW Angat (hydro), 147 MW Panay and Pinamucan (bunker), 114 MW Iligan I and II (diesel), 113 MW Tongonan (geothermal), 22 MW Bohol (diesel), and 1.8 MW Amlan (hydro).