Power, water supply woes to deter BPO investments

CEBU, Philippines - The inevitable power and water shortage in Cebu, if not addressed immediately, may hamper the potential of Cebu to attract more Business Process Outsourcing (BPO) investments. 

Cebu Educational Development Foundation for Information Technology (CEDFIT) official Gregg Gabison said utility providers for power and water in Cebu should immediately resolve this looming supply shortage, otherwise Cebu will miss a good chance of inviting big BPO investors.

While Cebu is positioning to become an “emerged” BPO destination in the world, basic necessities like water and power supply should be properly addressed, “sooner or later investors will find out this problem, and we are bound to lose them.”

According to Gabison, water supply shortage should be a major concern for authorities, if Cebu still wants to attract investors.

“The current water supply cannot even sustain the requirements of investors,” Gabison said.

More so, with the power supply, the frequent brownouts within the Metropolis due to lack of power is a major turn-off to investors.

On the other hand, the Visayas Electric Company (VECO) recently announced that it is building transmission line for Cebu Energy Development Corporation (CEDC).

“In pursuit of its mandate to deliver adequate, efficient and reliable service, VECO has prepared the following proposed major capital projects to be implemented within its franchise area for the year 2009: (a) 37 km Sangi-Naga 138 kV Tie Line and (b) 138 kV Switchyard & 100 MVA 138/69kV Substation,” a VECO statement said.

The 37-km Sangi-Naga 138 kV Tie Line will be dedicated to the supply of power from the Cebu Energy Development Corporation (CEDC”) power plant in Toledo City, as contained in a Memorandum of Agreement signed on August 3, 2009 between VECO and CEDC.

Without this Tie Line, the existing transmission capacity will be insufficient to export all the generation borne out of the Toledo area. In support of the Sangi-Naga 138 kV Tie Line project, VECO will also purchase and install a138 kV Switchyard/ 1 x 100 MVA/69kV Substation

Having experienced numerous outages this year, VECO projects outages to continue and worsen in the months to come and well into 2010. To avail of the benefits of the Tie Line as soon as CEDC is ready to export power by 2010, construction of the said line must start immediately.

The projects will be financed through internally-generated funds of VECO. The implementation of the projects will not result in any increase in VECO’s rates to its customers.

Also, private bulk water provider Mactan Rock Industries Inc., (MRII) is currently negotiating a joint venture with the Metro Cebu Water District (MCWD) for a joint venture deal to provide at least 5000 cubic-meter water a day.