Transco, Singapore Power set asset sale talks next mo

Talks between the National Transmission Corp. (Transco) and Singapore Power Corp. (SPC) are expected to begin next month, a ranking Transco official said.

"They (SPC) have completed their technical due diligence. They will be sending a new group to evaluate and analyze results of the due diligence," Transco chief operating officer Roque Corpuz said.

Corpuz said if the Singapore-based power firm will be able to thresh out the remaining technical and commercial issues, they could start the talks with Transco by late this month or early next month.

SPC is the only entity that had signified interest to bid for Transco assets valued between $2 billion to $3 billion.

The government decided to enter into a negotiated deal with SPC after it failed to get more buyers for the assets aside from the Singaporean firm.

Recently, however, a Finnish power firm has expressed interest in bidding for the Transco assets.

The Finland-based power company will be sending a group to conduct technical evaluation and due diligence on the assets.

If talks with SPC bogs down, Transco will continue to operate the country’s transmission system.

Without the privatization proceeds, Transco may end up securing new loans to finance its capital investment to improve the transmission facilities.

Based on the Transmission Development Plan (TDP) for 2002 to 2011, the country will need some P96.68 billion capital for the improvement and modernization of the transmission system for the 10-year period. Of this amount, some P30.85 billion or 31.9 percent will be needed for projects up for implementation, P47.7 billion or 49.3 percent for future or indicative projects and P18.13 billon or 18.8 percent accounts for ongoing projects.