Triratna group, ECCP welcome TransCo rebid

The Triratna/Newbridge/Tenaga Bhd. consortium welcomed yesterday the decision of the Power Sector Assets and Liabilities Management Corp. (PSALM) to rebid the 25-year concession contract of the National Transmission Corp. (TransCo).

In a statement, the Triratna group led by businessmen Ramon Ang of San Miguel Corp., Henry Sy Jr. of the SM Group and Joselito Campos of Unilab also lauded the Philippine government for deciding to address key issues in TransCo’s privatization.

The group said such a move should result in an improved valuation for the concession.

The European Chamber of Commerce of the Philippines (ECCP) is also in favor of holding a rebidding for the 25-year concession of TransCo.

In a press briefing yesterday, ECCP executive vice president Henry Schumacher said it is important for the bidding process to be fair. According to him, if a rebidding is necessary to ensure transparency, then it should be done.

Last week, the government was forced to declare a fourth failed auction for TransCo after only one consortium participated in the bidding for the P138-billion power grid. The group of Philippine investment firm Citadel Holdings Inc. and Italian power grid operator Terna SPA was the sole bidder

"If it (rebidding) leads to transparency and good governance then by all means," Schumacher said. "It has to be a fair process."

The need to ensure transparency was the reason behind the decision of the PSALM board to rebid TransCo’s

contract despite strong calls for the government to resort to a negotiated sale after four failed auctions.

Executive Secretary Eduardo Ermita in a press conference also pointed out that Republic Act 9184 or the law governing biddings and procurement still allows the government to look for other interested bidders despite several failed auctions.

"So for purposes of transparency and for the government not be charged with something in the future that it favored somebody unnecessarily, in all likelihood there would be another bidding," Ermita said.

"Definitely transparency is paramount. We have to be careful. We had so many bids that underwent so much scrutiny," he said.

He cited the case of the construction of the still-unopened Ninoy Aquino International Airport Terminal 3 where the contract underwent a Senate investigation and remains lodged in arbitration suits before the International Chamber of Commerce in Singapore and the International Court for the Settlement of Investment Disputes in Washington.

"We want to avoid all these (suits)," he said.

He said he is not aware why other reportedly interested parties for the Transco contract were not able to submit their bids on time but RA 9184 could give them another chance to participate in the next bidding.

He said Citadel/Terna, the lone bidder in the last failed auction that has been pushing for a negotiated sale, should not be discouraged by the PSALM’s decision as they could have an advantage over other possible bidders.

He said nothing prevents the Filipino-Italian consortium from joining another auction.

"I’ve a feeling that if they’ve (consortium) gone this far, they are really interested in TransCo and by now they really have a pretty good idea on the bidding process, the amount the government is interested in, so they can craft their own figures," Ermita said

"The Philippines’ decision to address these issues and bring the bidders back to the table will result in much improved valuation for Transco," Asish Shastry, Newbridge’s managing director for Southeast Asia.

Triratna holding leads the consortium combining top Filipino business leaders with American financial powerhouse Newbridge Capital and Malaysian power grid operator Tenaga National Bhd.

"We welcome the foresight of the government. We are prepared to do our part and bid as soon as the regulators address the issues that Finance Secretary Margarito Teves referred to in his press conference the other day," said Shastry. 

Shastry noted that the privatization of TransCo is vital to Philippine economic interests.

"It is the keystone of the Philippine privatization initiative representing the largest concession ever auctioned by the government," he said.

He also noted that the TransCo transaction should deliver a major injection of revenue to the government, further strenghtening the successful economic turnaround that the Arroyo administration has directed over the last two years.

He said the sale will send a strong signal to investors, both domestic and foreign, and further build confidence in the Philippines.

The government, he said, is empowered to invite the two parties who have expressed interest in bidding for the concession to face off in a direct auction. 

"This auction can take place immediately upon the clarification of the issues being addressed by the regulators," he said. "It is within the right of the Philippine Government, and in the country’s best interests."

Of the three pre-qualified bidders, only Citadel/Terna SPA submitted a bid.  Along with the Triratna-led consortium, the other group that opted not to submit an offer was Monte Oro/State Grid of China group.

Terna SPA sources said the Italian-led group wants to remain "silent" on the decision of the PSALM board to rebid the TransCo contract. 

The Chinese-led group has remained silent on their TransCo bid.

"They do not want to make any comment at this moment," the source said.

The group earlier threatened to walk away from the TransCo bid if the government will opt to auction off anew the transmission assets.

It is sitll uncertain if the Italian-led consortium has changed its mind and decided to participate in the rebidding or instead packed their bags and put their investment somewhere else in Asia.

The investment of Terna SPA in TransCo was supposed to be its first in Asia. Terna is the largest transmission firm in Italy and second biggest in Europe. ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Â With Aisa Osorio