Albay Electric Coop turnover slated anew for February 26
After the protests have dissipated, the turnover of Albay Electric Cooperative (ALECO) to the designated subsidiary of San Miguel Global Power Holdings Corporation may finally happen this February 26.
This was confirmed by National Electrification Administration (NEA) chief Edita S. Bueno, emphasizing that the new turnover date was agreed upon by both ALECO and San Miguel Corporation.
SMC was the lone bidder in the privatization process undertaken last year for the ailing electric cooperative. This was affirmed by a referendum participated in by EC-members last September.
The offer to take over the management and operations of ALECO will be placed under SMC subsidiary Albay Power and Energy Corporation (APEC). This has been anchored on the strength of a 25-year concession arrangement that the parties have entered into.
The SMC firm would have started operating the Albay power utility last month, but the management changeover process stalled because some disgruntled groups picketed ALECO’s grounds.
SMC had to address first the issues raised by these parties while also preparing for an apparent transition that will be on acceleration mode this month.
Under the concession deal, SMC will be shelling out initial P250 million for the electric cooperative’s immediate capital expenditure needs; while additional P350 million will be earmarked for separation of employees who will be affected by APEC’s takeover.
As a concessionaire, APEC will also take the pain of paying the P4.7 billion worth of liabilities which saddled ALECO prior to its privatization.
The private sector participation (PSP) program is a scheme tested by government, through the supervision of the Department of Energy (DOE), on how to resuscitate the operational viability of ailing ECs by tapping private investors to run their operations and management over a specified period.
After ALECO, NEA and DOE have been eyeing to employ the same privatization strategy to other ECs which are facing both financial woes and operational hurdles.