PSALM sets TransCo bidding on November 7

The Power Sector Assets and Liabilities Management Corp. (PSALM) announced yesterday that it has set the bidding for the 25-year concession contract of the National Transmission Corp. (TransCo) on Nov. 7 this year.

PSALM, the state-run agency tasked to privatize the assets of the National Power Corp. (Napocor) including its transmission facilities, said the concession agreement will involve the construction, finance, operation and maintenance of TransCo facilities and assets.

The winning concessionaire will also be bound to implement TransCo’s rehabilitation and expansion program.

PSALM vice president for finance Nonito R. Bernardo Jr. said pre-qualified bidders must submit their respective technical and financial bid proposals representing their proposed concession fee.

Bernardo said interested bidders who had paid the required participation fee and secured their transaction documents would soon be submitting documents required for the pre-qualification process.

PSALM would then announce the bidders pre-qualified to join the public bidding.

In mid-October this year, PSALM will hold a pre-bid conference where pre-qualified bidders will be invited to raise issues regarding the proposed sale procedures, including the terms and conditions, for the TransCo concession.

Bernardo reminded prospective bidders that failure to acknowledge receipt and acceptance of the terms and conditions of the bidding procedures could result in the disqualification or outright rejection of their bid.

Bidders for the TransCo concession must have a member or affiliate with experience in operating and maintaining electricity transmission systems comparable to that of the Philippines, with at least 6,000 circuit kilometers, a minimum 6,000 megawatts peak demand and a voltage level of 115 kilovolts (kV) to 230 kV.

At the same time, the member of the prospective bidder who meets the technical pre-qualification criteria must have a net asset value or market capitalization of $500 million.

Bidders should also have the capability to form a concessionaire who will meet the 60-percent Filipino ownership restrictions for grantees of a public utility franchise. The largest foreign and Filipino members of the prospective bidder will also need to pass a net asset value market capitalization test.

TransCo is one of the most profitable but regulated corporations of the government. It posted a net income of P9.13 billion for the first semester of its operations this year, higher by P605 million compared to the same period in 2005.

The forthcoming bidding is the third attempt to privatize TransCo after two setbacks in 2003.

The government is expected to raise some $2.5 billion to $3 billion from the lease of TransCo’s assets to a concessionaire.

PSALM had earlier reported that 12 groups are interested in the bidding this year.