PSALM to cover rehab costs of 2 hydropower plant complexes

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM) will shoulder the funding for the rehabilitation of the Agus and Pulangui hydropower plant complexes.

PSALM president and CEO Emmanuel Ledesma Jr. said the rehab of the hydropower plant was proposed by the National Power Corp. (Napocor).

“Since PSALM signed the Operation and Maintenance Agreement with Napocor, PSALM will fund the Agus-Pulangi rehabilitation either through income from power plant operations or through financing,” Ledesma said.

Earlier estimates showed that the government may spend about P3 billion to keep the Agus-Pulangi facilities running.

“For the rehabilitation works that needed to bring up additional capacity for our hydropower facilities in Mindanao, it will cost around P2 billion to put in an additional of about 100 to 200-MW capacity. But if we would like to add or uprate some of the facilities, for instance the Pulangi which will include the cost for dredging, then we’re looking at spending about P3 billion, Napocor president Froilan Tampinco said earlier.”

At present, the executive and legislative bodies are evaluating their options on the privatization of Agus-Pulangi hydropower complex, which under the Electric Power Industry Reform Act (EPIRA), should be auctioned off 10 years after the passage of the power bill. EPIRA was passed in June 26, 2001.

 The privatization of Napocor assets and contracts is crucial for the National Government to reduce Napocor’s debts.

“The completion of the privatization program is necessary to check the further accumulation of debts because, historically, the remaining generation assets and the IPP plants operate at a loss. Further delays in the privatization program, on the other hand, may increase the amount of the indicative shortfall,” PSALM said.

Meanwhile, Ledesma said they would resume the government’s privatization program in the second half of 2011.