Gov’t to sell 60% of power assets by early 2007 – Teves

The government expects to privatize up to 60 percent of its power generation and transmission assets by early 2007, according to Finance Secretary Margarito Teves.

He said the sale of the assets of National Transmission Corp. (TransCo), the sole operator of the country’s power transmisson network has been set on Dec. 20.

Preliminary government estimates show that TransCo’s assets could now be worth as high as $3 billion from its $2 billion valuation in 1996.

The government is also set to rebid the 600-megawatt coal-fired power plant in Masinloc, Zambales in the first quarter of 2007, Teves added.

The board of the Power Sector Assets and Liabilities Management Corp. (PSALM), with Teves as chairman, decided to rebid the power plant after YNN Pacific Holdings and Malaysian partner Ranhill Power Bhd failed to deliver the upfront payment of $227.5 million for the $562-million purchase of the Masinloc power facility. This resulted in the official termination of the contract and the forfeiture of the $14 million performance bond in favor of the government.

YNN Pacific edged Lopez-controlled First Generation Holdings in a bidding in December 2004. First Gen submitted a bid of $274.85 million, way below the floor price of $388 million set by the government.

PSALM is now drafting the new terms of reference for the public bidding, which will include the price and repayment terms.

Teves said the government will also pursue the sale of its shares in food and beverage conglomerate San Miguel Corp. and power distributor Manila Electric Co. hopefully by the first semester of next year.

The government is hoping to raise its projected proceeds from the sale of state-owned assets to about P2 billion from last year’s P500 million.

The country intends to reduce its budget deficit and the borrowings that need to finance it, and eventually balance the budget by 2010 with new tax measures that will raise revenue by P80 billion annually.

The government had earlier sold its Manila Gas property in Paco, Manila for P537 million. The four-hectare property was sold to Robinsons Land Corp. at a price lower than the government’s indicative target of P637 million. About P300 million of the sale proceeds went to the National Government while P137 million has been deposited with the Bureau of Treasury.

Also up for sale within the year is the government’s majority stake in water utility firm Maynilad Water Services Inc.