Transco sale attracts new prospective bidders

A number of new investors have signified interest to bid for the National Transmission Corp. (Transco), the country’s top energy official said.

"I am hoping there will be new additions. We have received inquiries from a number of groups," Energy Secretary Raphael P.M. Lotilla said while declining to identify the new groups, Lotilla welcomed the entry of more potential investors in Transco. "We are hoping they will also participate to make the results more credible."

It was reported last year that food and beverage giant San Miguel Corp. (SMC) has joined forces with Japan’s Tokyo Electric in bidding for the $2-billion nationwide transmission highway under Transco.

Other groups reportedly eyeing to bid for Transco are Electricity Generating Authority of Thailand (EGAT) and a Filipino firm; Hydro Quebéc and the Delgados of the Transnational Diversified Group and Metro Pacific Corp. and Australia’s Trans-Grid.

But Lotilla admitted they would need more time before they could actually proceed with the Transco bidding."The draft TOR (terms of reference) is voluminous. That’s why we appreciate the wisdom of Congress in recognizing that it cannot do all these things by itself."

Congress said earlier it would move the target date for Transco’s privatization to October this year instead of July to make the schedule "more realistic".

"We have a specialized administrative body that will implement the law, and the accountability is well defined. We just have to keep them informed on the directions we are taking to implement the policy laid down by the EPIRA (Electric Power Industry Reform Act)," Lotilla said.

The energy chief also admitted that the Transco privatization would not be successful without the participation of the legislative, executive, public and private sectors. "We want to build support from Congress, from the private sector, business sector. They look at the privatization of Transco and generation assets, as they know this will provide the long term solutions for the industry," he said.

The new timeline for Transco’s privatization was revealed by chief economic strategist and Albay Rep Joey Salceda. "This could be a more reasonable target. We have to do this so as not to disappoint investors," he told reporters in an interview.

Salceda said the Transco privatization is part of the overall economic development package being pushed by the Arroyo administration.

"Privatization is part of the collective efforts of the government. The executive branch will try to deliver on taxes, some should also deliver on their privatization effort,"he said.

According to Salceda, there are some factors that need to be addressed before the privatization of Transco pushes through. "We need to get creditors’‚ consent," he said.

One of the multilateral creditors of Transco, he said, even wants some environmental issues resolved before giving its consent on Transco’s privatization.

Transco president Alan T. Ortiz, in a separate interview, said they have completed the new TOR for the proposed public bidding scheme.

Former Energy Secretary Vincent S. Perez earlier said the Power Sector Assets and Liabilities Management Corp. (PSALM) was trying its best to privatize Transco by July this year.

The TOR is expected to continue to carry previous terms such as that the winning concessionaire should have technical and financial capabilities in running a transmission company; and should conform with the 60-40 percent foreign ownership limit.

It would be recalled that PSALM has to come up with a new set of sale guidelines when it decided to shift from negotiated sale to a public bidding as a form of privatization scheme for the country’s largest power transmission highway.

The National Government aims to raise about $2 billion to $2.5 billion revenues from the sale of Transco.