Finally, something is moving!

At very long last, something is finally moving in this administration by way of a major infrastructure project. The San Miguel-Citra version of the connector road will break ground on Thursday next week, Jan. 23, with no less than P-Noy doing the honors.

The project had long been awarded by San Miguel-Citra to DMCI but it took a long while for P-Noy’s Cabinet members to sort out a legal issue over PNCC’s participation. It took two opinions from DOJ to convince Finance Secretary Cesar Purisima to allow the project to go with PNCC participation.

A Marcos decree which remains a law of the land until repealed by Congress gives PNCC the right to participate in any tollway project that connects to the original North and South Expressways. Sec Purisima was worried, and rightly so, that the loss of PNCC’s franchise affects that right. Apparently, it does not.

From the San Miguel-Citra connector road, PNCC will earn 2.5 percent of gross revenues for years one to four, three percent for years four to seven, 3.5 percent for years seven to 10, and four percent for years 10 onward. PNCC also gets 10-percent equity for free.

From MetroPacific’s connector road, PNCC will get 2.5-percent equity for free and six percent of gross revenue from day one for 30 years.

 So now it is full steam ahead for this project. The paperwork was completed and signed in time for Ramon Ang’s birthday last Tuesday.

I understand San Miguel-Citra plans to complete the first stage from Buendia, where the current Skyway ends, to Nagtahan in time for the APEC meeting in November next year. That will assure a smooth ride, free of traffic congestion, for visiting heads of state from the airport to Malacañang.

I hear MetroPac has finished commercial negotiations for their version of the connector road and the ball is now with the Toll Regulatory Board or TRB. Hopefully, this agency under DOTC will act faster than the lawyers at head office.

This second connector road also has an aggressive construction schedule. One segment that links NLEX to MacArthur highway is 2.4 kms long and costs P1.6 billion with completion middle of this year.

The next segment called the Harbor Link is 5.8 kms with total cost of approximately P10 billion. Hopefully, this segment will start construction within the second quarter. This segment connects the North and South Expressways to the Manila port area. The cargo trucks using this road will help decongest ground traffic in Metro Manila.

Construction of the connector road over PNR right of way can start in July if all approvals are given within the first quarter with its final cost to depend on negotiations with PNR. This segment will join a common alignment with San Miguel-Citra in Plaza Dilao at Paco to Buendia.

It seems that Louie Sison and his PNCC crew are on a roll. I understand that C6, the road that will provide another north to south link parallel to C5 and EDSA is also ready to be constructed by the same Citra-San Miguel consortium. All it is waiting for now is the STOA from TRB. PNCC will get the same deal here from the San Miguel-Citra consortium as that is prescribed in their connector road project with them.

What makes an early construction start highly possible is that surprisingly enough, I am told DOTC itself is pushing the project. The first phase of C6 will connect with SLEX at FTI where DOTC is rushing the construction of the Southern Bus Terminal, a priority project of P-Noy. They desperately want to deliver this bus terminal before the end of P-Noy’s term as a contribution to the traffic alleviation efforts for Metro Manila.

C-6 will go through the lakeshore area of Laguna de Bay passing the towns of Taguig, Pateros, Pasig crossing Ortigas Ave. Extension, Valley Golf area and the Batasan area for its first phase. The second phase will connect C-6 with NLEX at Bocaue via San Jose del Monte. 

I understand the 15-hectare PNCC property in the reclamation area at Macapagal Avenue will be jointly developed with a private investor as a world class recreational area following the no cash contribution formula of PNCC’s participation in the tollways projects. This is a job tailor made for former DTI usec Tito Panlilio who is now a PNCC director and chair of the JV Nego committee.

All these projects make PNCC a valuable company again. Its share in the income of these new tollways, at no cost to PNCC, will be substantial once operations start.

The Commission on Audit (COA) should reconsider its opinion of  this GOCC and see it as a going concern again. A favorable COA ruling will be a basis for a lifting of the trading suspension on PNCC shares at the PSE. PNCC would be a good bet on the future of the country.

Government should consolidate all its holdings at PNCC and use it as its corporate arm to fast track infrastructure development. Provided PNCC is managed professionally as it is being managed today, it could be a key government asset. The problem is that past administrations, specially Ate Glue’s, used it as a milking cow of political allies .

Indeed, they shouldn’t have sold PNCC’s property in Mandaluyong. They should have just entered into a joint venture development deal. The commercial potential of that site was so obvious that its disposition almost looks like plunder.

Self generation and the grid

Roland M. Lorilla sent me an e-mail reacting to our column last Monday on the power situation. He doesn’t believe a power shortage is inevitable because “there is a huge amount of standby generating capacity, already installed and available just waiting to be utilized.”

He continues: I am talking about the thousands of standby diesel generators installed everywhere, in malls, factories, buildings and business establishments. There could easily be 1000 megawatts (mw) available capacity and perhaps much more.

ShoeMart easily  would have 100mw. Every Jollibee and McDonald’s has a 100 kw and there are a few thousand of them and similar other establishments. Most high rise building would have 500kw to 2000 kw and there are hundreds of them too.

If no new power plants come on line and the power situation becomes critical, P-Noy must tap this source of power.

But there is a need to allow private generating sets to connect with the power grid via net metering. This will allow gensets to link up with the grid and make possible the import and export of electricity. The idea is for establishments (power consumers) to generate their own electricity and export the excess to the grid.

Net metering is akin to using a bidirectional kilowatt hour meter. When one is a net importer of power from the grid, the meter goes one way and when he is exporting power to the grid the meter goes the other way. He only pays for his net consumption.

Tying up with the grid is the crux of the matter here for it will allow the gensets to operate at optimum condition of load thereby maximizing its utility and efficiency.

Tax credit must be given to diesel genset operators. The amount of tax credit must be the amount of taxes levied on the consumed diesel and lube oil to generate power. Further tax credit can come from rebates of import duties and taxes when the gensets were imported as well as tax exemption from other taxes that can be levied on operating a generator. Simply said, make the operation tax free.

The implementation of all environmental laws and regulations (e.g. Clean Air Act) pertaining to operation of diesel engines for power generation must be suspended. The cost of complying with these laws and regulations are a huge hindrance to making small scale power generation feasible.

We have to make small scale power generation a profitable endeavor for many. The power consumers become stakeholders in power generation. It will also stimulate innovations in power generation.

More importantly, it will stabilize the cost of power because consumers can now generate their own electricity whenever grid power is deemed too expensive. In effect the cost of self generation becomes the limiting price of grid power.

So there it is: a quick fix solution to the impending power shortage. I did some rough computations and assuming a 100 kw base load genset operating at full load of 100 kw, with the cost of diesel fuel at P45/liter, the total cost of generation is roughly at P14.82/kwh.

Leviticus

From my Facebook newsfeed:

It all makes sense now. Gay marriage and marijuana are being legalized at the same time.

Leviticus 20:13 says if a man lays with another man, they should be stoned.

People have just been misinterpreting it.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco