Lotilla sees no more snags in Feb 5 TransCo bidding

BAGO CITY, Negros Occidental – State agency Power Sector Assets and Liabilities Management Corp. (PSALM) will proceed with the bidding for the 25-year concession contract of the National Transmission Corp. (TransCo) on Monday, Feb. 5, Energy Secretary Raphael Lotilla said.

In an interview at the sidelines of the Northern Negros geothermal plant inauguration here, Lotilla said he does not foresee any more delays in the privatization of the TransCo's assets early next week.

"Preparations (for the bidding of TransCo) are proceeding as scheduled.  We are ready to proceed by Monday," Lotilla said.

Lotilla said as of late Friday, "there have been no problems raised by prospective bidders."

PSALM will hold the bidding proper at the Development Bank of the Philippines (DBP) building in Makati. The procedure will be similar to that of the Philippine National Bank (PNB), wherein media will be briefed first and allowed to witness the bidding process until 12 noon the closing period. Evaluation is expected to take seven hours. The government asset management firm said it would announce the winning bid by 7 p.m.

The TransCo bidding, one of the most anticipated privatization process of the National Government as this will raise some $3 billion in additional revenues, was pushed back several times after prospective bidders requested for more time to undertake their respective due diligence studies.

The energy chief said he sees no reason in further delaying the bidding process for  the contract to run the country’s power transmission highway.

"We see no problem in proceeding with the bidding.  We want it done as soon as possible," he said.

Once selected, the winning bidder will have at least a year to file for its own franchise.

Lotilla said he is optimistic the winning concessionaire will not encounter any difficulties securing the franchise from Congress.

"The winning bidder will have an option as to when they could apply or secure the franchise.  Some investors don’t have the luxury of time. They may get the franchise earlier than one year," he said.

What government should focus on, Lotilla said, is that the result of the bidding will consider the interest of the government, the investors and the consumers.

The three pre-qualified groups that are expected to bid for the concession of the country’s sole transmission arm include the consortium of Triratna Holdings Corp. Tenaga Nasional Bhd. and Newbridge Asia IV, L.P.; the consortium of Citadel Holdings Inc. and Terna SPA; and the consortium of Monte Oro Grid Resources Corp. and State Grid Corp. of China.

The first consortium consists of local firm Triratna Holdings Corp. (60 percent) Malaysia’s Tenaga Nasional Berhad (five percent) and Newbridge Asia IV, L.P. (35 percent) Triratna is represented by a powerhouse group of businessmen led by retail king Henry Sy Jr., San Miguel president Ramon Ang and Unitel Laboratories’ Joselito Campos.

Tenaga Nasional, a state-owned power company in Malaysia, was one the first names that signified interest in TransCo some years back Newbridge is a US-based investment group.

The second group of bidders is composed of Citadel Holdings Inc. (60 percent) and Terna SPA (40 percent). The group is represented by Rogelio Singson.

Citadel is the investment vehicle of the Delgado family enged in exports, logistics and transportation while Terna SPA is one of the biggest power companies in Italy involved in the production and transmission of electricity for domestic and industrial use.

The last group consists of Monte Oro Grid Resources Corp. (60 percent) and State Grid Corp. of China (40 percent). Monte Oro is represented by Philex Mining chairman Walter B. Brown while State Grid is the largest transmission firm in China.