Two local groups show interest in Transco assets

Two local equities firms have indicated a keen interest to participate in the bidding for the transmission assets of the National Power Corp. (Napocor), a government official said over the weekend.

"There are some local equity investors that have signified interest to bid," Power Sector Assets and Liabilities Management Corp. (PSALM) president Edgardo del Fonso said.

PSALM, under Republic Act 9136 or the Electric Power Industry Reform Act of 2001, will absorb all the assets and liabilities of Napocor and will handle the power firm’s privatization. EPIRA also mandates the creation of the National Transmission Corp. (Transco) which will handle the transmission assets of Napocor.

Del Fonso said based on the privatization rules, Transco will have to be 60-percent owned by a local group and 40 percent by foreign investors.

"We have to follow the 60-40 percent ownership rule. There are some local groups that have approached PSALM but have not officially come out in the open to express their desire to bid for Transco," he said.

According to del Fonso, the interested foreign investors will have to seek a local partner to meet the requirement of the law.

Late last year, there were reports that some big local conglomerates led by the Ayalas and Gokongweis could be planning to participate in the Transco privatization. The Ayala family controls BPI Capital, its investment vehicle while the Gokongweis own JG Summit Holdings Inc. The reports were neither confirmed nor denied.

At present, there are four Asian firms that have signified keen interest to join the bidding for Transco.Del Fonso did not clarify if these Asian companies already have local partners.

Last year when the privatization of Napocor’s transmission assets was announced, several foreign power firms indicated interest to bid. These power companies are those based in Hong Kong, Thailand, Singapore and New Zealand.

The Konsortium Logistik Berhad (KLB), the biggest power company in Malaysia, has also indicated interest to bid for the transmission and generation assets of the Napocor.

A close relative of President Mahathir, Mirzan Mahathir, executive chairman and president of KLB, had met with officials of PSALM and Department of Energy (DOE) mid-202 to discuss their intention to participate in the Napocor privatization.

Tenaga Nasional Berhad vice president for corporate affairs Datuk Sidek Bin Ahmad also expressed interest to look into the generating and transmission assets of Napocor.

Spain-based Red Electrica had sent a team to the Philippines to study its bid for Transco.

Other groups that have expressed interest on the transmission and generation assets of Napocor include: Intergen, Mid American Energy Holdings Inc., Edison Mission Energy, Hydro Quebec, and National Grid.

There are five Japanese firms that have also indicated plans to participate in the bidding. They are Kansai Electric Corp., Kyushu Electric Corp., Electric Power Development of Japan and Tokyo Electric.