Australia’s Great Pacific Financial still keen on Masinloc

SYDNEY, Australia – Great Pacific Financial Group, the Australian partner in the YNN Pacific consortium that won in the bidding for the 600-megawatt Masinloc coal-fired power facility in the Philippines, said it is still keen in acquiring the plant.

"We are still the funder of that project," Great Pacific chairman Alfred Wong said in a brief interview with Filipino reporters currently on a study tour of the Australian electricity spot market.

Wong, however, did not provide an update on the planned investment, saying his Filipino counterpart/representative in YNN Pacific is the group’s designated spokesperson.

In a telephone interview, YNN Pacific spokesman Gary Makasiar admitted that "there are issues yet to be resolved."

"We have been raising some concerns. We are looking for answers to our questions before we can make the payment to the project," Makasiar said.

Makasiar hinted that with issues yet to be threshed out, the Dec. 2 schedule for the upfront payment of more than $200 million representing 40 percent of the power facility "might not be met".

He said a major concern the YNN Group raised is mostly political in nature. "We are affected by the impact of the political issues such as the outcome of the investigation of the Garci tape and the possible take-over by the government of vital public utilities including power plants."

Another concern, the YNN official said, is the performance of the wholesale electricity spot market (WESM).

The government has to sell 70 percent of the assets of National Power Corp. (Napocor) in preparation for open access. The WESM, on the other hand, was established to create a competitive market that would help bring cost-effective electricity to consumers.

"These are just some of the uncertainties in the market. Though we are optimistic the deal will be completed, we need to know the marketability of the power plant. We don’t want our investment to go to waste," Makasiar said.

The YNN Pacific consortium consists of YNN Holdings, a group of Filipino investors, and Great Pacific Financial Group. The Australian group will reportedly tie up with a big power firm in Australia to help in the running of the newly-acquired power facility.

Great Pacific is a diversified company with interests in financial services, property, hotels, infrastructure and mineral resources. It has an interest in Pacific International Hotels, the fifth largest hotel chain in Australia, apart from its hotel properties in Bangkok (Thailand) and Shanghai (China).

Great Pacific also has extensive experience in infrastructure and power investments through its holdings in a coal-fired power plant in China and a controlling interest in an Australian-listed green energy company, Green Pacific Energy Ltd.

On top of its power industry experience, Great Pacific also has significant presence in Australia’s coal industry with its investments in two significant coal mines in the Wollongong and Hunter Valley regions of New South Wales. The two collieries represent a total of more than 400 million tons of coal reserves, adding further synergistic benefits to the Masinloc acquisition.

Great Pacific’s policy in its overseas investments is to team up with a local group with experience in the particular industry of interest and is sufficiently knowledgeable about the local operating environment.

Despite these concerns from the YNN Group, the Department of Energy (DOE) and the Power Sector Assets and Liabilities Management Corp. (PSALM) said they have high hopes the deal will be finalized and the government will get the much-needed proceeds that would be raised from the sale. PSALM, an entity created under the Electric Power Industry Reform Act (EPIRA), is tasked to oversee the sale and privatization of the generation and transmission assets of the state-owned Napocor.