Cebu-based Vivant to bid for Napocor assets in Masbate

Vivant Corp., a major shareholder of Visayan Electric Co. (VECO), plans to participate in the bidding of power generation assets of the National Power Corp. (Napocor) in Masbate.

In a disclosure to the Philippine Stock Exchange (PSE), Vivant said its board has approved the company’s participation in the Napocor bidding.

"The board of directors of Vivant Corp. has authorized participation in the bidding for private sector participation in power generation in Masbate, conducted by the Power Sector Assets and Liabilities Management Corp., the Napocor and the Department of Energy," the company disclosure said.

VECO, the country’s second-largest private distributor of electricity, has a franchise that covers the central province of Cebu. It serves more than 275,000 customers in the cities of Cebu, Mandaue and Talisay and five municipalities of Metro Cebu. Its franchise service specifically covers an area of about 672 square kilometers with an estimated population of 1.34 million as of 2004. A total of 2,063.7 kilometers of primary lines and 3,082.05 kilometers of secondary lines have been built in its franchise area.

VECO is jointly owned and managed by the Aboitiz and Garcia families of Cebu.

Recently, Napocor announced that at least 12 investors have expressed interest to participate in the bidding for its SPUG (small power utilities group) in the province of Masbate. The sale of SPUG assets represents the second time Napocor will bid out its assets in a particular area.

Launched last July 25, 2006, the private sector participation in the Napocor-SPUG areas for Masbate had positive results in as far expression of interests are concerned.

The International Finance Corp., the investment arm of the World Bank which handles the SPUG privatization, has issued requests for proposals as early as end August.

The report also indicated that activities relative to the second private sector participation has also been started in Occidental Mindoro.

"Due diligence report was completed in March 2006. There are legal and contractual issues that need to be resolved. IFC will submit its formal recommendations to address these issues," the report said.

The third batch of the sale for SPUG, comprising of the three islands of Sulu, Basilan and Tawi-Tawi in Mindanao, will kick off with the signing of a memorandum of agreement (MOA) with each of the island’s electric cooperatives.