By MYRNA M. VELASCO
Hounded by delays in some auctioned National Power Corporation (NPC) assets, the Power Sector Assets and Liabilities Management Corporation (PSALM) has laid down stringent requirement of at least 00-million market capitalization for those interested in the concession deal for the spinoff National Transmission Corporation slated for bidding in September this year.
To comply with the 6040 ownership limitation prescribed under the Philippine Constitution, PSALM specified that the foreign partner must have a capitalization of 5 million while the Filipino company must have 0 million.
According to PSALM president Nieves L. Osorio, "the 0-million market capitalization was set to optimize the TransCo assets ...including its operation and maintenance."
The Constitution restricts to 40 percent the ownership of foreign investors of public utilities, to which TransCo was classified to be one.
With the asset liquidation firm now just waiting for the decision of the Energy Regulatory Commission for TransCo’s maximum allowable revenue that shall determine its wheeling charges from 2006 to 2010, PSALM declared that it can already open its doors for expressions of interest (EOI) from interested parties.
"Interested investors can now start submitting their expressions of interest. PSALM will receive these expressions of interest until mid-July 2006,"it announced.
Despite string of delays, energy officials are keeping their hopes that it would finally happen this time.
Aside from the financial capability of the bidders, PSALM also adheres to the mandate of the Electric Power Industry Reform Act, that interested investors would have technical capability to operate the country’s transmission facilities.
"To be qualified, prospective bidders must have a member or affiliate with sufficient experience in operating and maintaining electricity transmission systems comparable to that of the Philippines," the asset liquidation firm has emphasized.
TransCo’s assets cover 6,000 circuit kilometers and a minimum 5,000 megawatts peak demand and a voltage level of 115 kilovolts (kV) to 230 kV.
Qualified bidders are to be given ample time to conduct their due diligence. PSALM said transaction documents for the scheduled bidding are now available.
PSALM also reminded prospective investors that only those having no direct or indirect involvement in other segments of the electricity business - such as generation, distribution and supply— shall be prequalified to join the auction.
Osorio stressed "only bidders who pass the prequalification phase would be allowed to submit bids."
PSALM set on record that the forthcoming bidding is already the third attempt to privatize TransCo after two failures in 2003.
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