Lawmaker questions gov’t valuation of TransCo

The government, for unknown reasons, has undervalued the National Transmission Co. (TransCo), which owns high-voltage transmission wires and facilities throughout the country, an opposition congressman said yesterday.

Bukidnon Rep. Teofisto Guingona Jr. said the Power Sector Assets and Liabilities Management Corp. (PSALM) has quoted an “indicative price” of $3 billion for TransCo, which it will auction this month.

He said the price is too low, considering that TransCo makes about P20 billion or nearly $500 million a year in net profits.

If an investor takes over TransCo for $3 billion or even $4 billion, he would recover his investments in four years, he added.

Guingona pointed out that TransCo should command a much higher price since it is a monopoly.

“Besides, it owns fiber optic wires and national transmission lines and grids, which can serve as a communications backbone,” he stressed.

TransCo and PSALM have been created by Congress under the Electric Power Industry Reform Act (Epira) of 2001.

PSALM was tasked to sell assets of the National Power Corp. (Napocor), including its transmission facilities, which were transferred to TransCo.

Guingona noted that PSALM has sold one Napocor plant, the 600-megawatt facility in Masinloc, Zambales, for nearly $1 billion.

He said TransCo is a much bigger and more valuable asset.

“The government should make the most out of impending sale of this asset for the benefit of millions of electricity users who are paying for the loans used to build Napocor facilities,” he said.

He surmised that the TransCo bidding has been tailored to favor administration cronies.

He said at least one bidder is a close to Malacañang and is a friend of PSALM president Jose de Ibazeta.

He also questioned the disqualification of one bidder, La Costa Development Corp., for still unclear reasons.

PSALM has announced that it would prepay $1 billion in Napocor loans using proceeds from the sale of its assets.

“They should have already done that using proceeds from the sale of Masinloc and other assets,” Guingona said.

He said prepaying Napocor loans could mean lower electricity rates for consumers who are paying for these loans by way of additional charges included in their monthly bills.