PSALM sets sale of Transco assets next week

The Power Sector Assets and Liabilities Management Corp. (PSALM) said yesterday it is set to launch next week the much-awaited privatization of the transmission assets of the National Transmission Corp. (Transco).

PSALM president Edgardo M. del Fonso said they will start to release formal notices to local and international newspapers starting on Monday (Jan. 27), inviting expressions of interests from potential bidders.

The privatization process will start despite the absence of the Transco bill that will grant the concessionaire a franchise to operate the transmission assets.

According to Del Fonso, they will subsequently issue an information memorandum, which provides detailed information about Transco and other bidding documents to interested parties ahead of the public bidding.

Under Republic Act 9136 or the Electric Power Industry Restructuring Act (EPIRA), PSALM is mandated to carry out the privatization of Transco.

Based on the privatization blueprint approved by President Arroyo in October 2002, Transco’s facilities will be privatized by way of a concession.

Del Fonso explained that the Transco privatization will be carried out in two phases.

The first phase, he said, will enable PSALM to award a concession to operate, maintain, rehabilitate, expand and finance the nationwide high voltage transmission grid in favor of the concessionaire.

Phase two shall commence when Congress approves a franchise in favor of the concessionaire. At that point, the concessionaire shall take over as the grid operator and run the entire transmission system.

Meanwhile, Energy Secretary Vincent S. Perez said this approach would enable the privatization of Transco even as Congress deliberates on a franchise bill.

"We could no longer wait for Congress‚ action to approve the Transco franchise bill. We have to move ahead because there are a lot of things hinge in Transco privatization," Perez said.

The privatization of Transco, Perez said, will also smooth the way for the successful sale of the National Power Corp.’s (Napocor’s) generation assets and implementation of the power sector restructuring.

Del Fonso said the timetable for the privatization of Transco will cover a period of about six months, including the period required for due diligence.