The bill granting the National Grid Corp. of the Philippines (NGCP), a 25-year franchise to manage the country’s electric transmission system has been approved and signed into law by President Arroyo.
After securing the franchise, NGCP has one month to take over the operations of the National Transmission Corp. (TransCo). The contract includes the right to operate 21,319 circuit-kilometers of transmission lines, including a submarine cable system and 93 substations.
While the grid will remain government property, all profits will go to the private consortium made up of Monte Oro Grid Resources Corp. (MOGRC), Calaca High Power Corp. and the State Grid Corp. of China. MOGRC is 100 percent owned by Monte Oro Resources and Energy Inc. of which publicly-listed A Brown Co. Inc. of businessman Walter Brown owns an 18.4 percent interest.
The consortium won in the bidding held by the Power Sector Assets and Liabilities Management Corp. in December last year with its offer of $3.95 billion.
The franchise will require the consortium to pay up to 25 percent of the bid price or about P1 billion and the balance to be paid within 20 years.
The group needs to shell out some $725 million until 2010 to upgrade and modernize TransCo’s facilities to be able to sustain the uninterrupted supply of power to its customers.
Monte Oro Resources president Brown earlier said the consortium was in talks with several local and foreign investor groups that have signified interest to join the project. Multilateral agencies including the Asian Development Bank have offered loan facilities for the project.
The sale of TransCo marked the biggest contract awarded by the government under its privatization plan.