Asian, European firms keen on Napocor assets

A number of Asian and European power companies have expressed keen interest in participating in the privatization of the National Power Corp. (Napocor), outgoing Energy Secretary Jose Isidro Camacho said.

"They (Asian and European investors) have been visiting me," Camacho said in a press conference yesterday. He did not identify the foreign power firms.

Camacho said some existing independent power producers (IPPs) have also expressed interest in buying some of the assets of Napocor.

"This is the reason why I’m very optimistic about the passage of the new power bill because of the long-term view of these IPP contractors," he said.

He said this might also mean that the IPPs would be willing to renegotiate with the government their existing contracts with the state-run Napocor.

He noted that one of the main issues being raised by the power bill oppositors is the controversial IPP contracts which constitute some P500 billion out of the total P900-billion liabilities of Napocor as of end-2000.

However, Napocor president Jesus Alcordo said they are only shouldering some P8 billion losses in take-or-pay agreement with the IPPs.

Camacho pointed out that this is precisely the reason why the government wants the bill passed since the law will allow them to review the contracts and renegotiate if possible.

Some sectors are saying that the government should pass the bill after the review of the IPPs. "We should go ahead with the passage of the Bill and not wait for the result of the review since this will take time," he said.

Under the proposed law, the energy secretary said there will be an IPP administrator who will manage the privatization of the IPP contracts.

Once the bill is passed, a corporation called Power Sector Assets and Liabilities Management (PSALM) Corp. will take over all the assets and liabilities of the Napocor.

PSALM, to be chaired by Camacho, will also take charge of the disposal of the assets to various investors. The government expects to raise some $4.5 billion from the privatization of Napocor.

If the bill will not be passed this year, the government will have to shoulder the P38 billion in annual investments requirement of Napocor.

Budget and Management (DBM) Secretary Emilia Boncodin said this P38 billion will automatically be added to the burden of the National Government since all of the loans of the power firm are guaranteed by the government. The budget deficit is seen to hit P145 billion this year.