GMA urged to certify as urgent bill on TransCo congressional franchise

Consumer and Oil Price Watch (COPW) chairman Raul T. Concepcion will urge President Arroyo to certify as urgent a bill which will allow the winning bidder of the National Transmission Corp. (TransCo) a 25-year congressional franchise.

Power Sector Assets and Liabilities Management Corp. (PSALM) president Nieves L. Osorio and TransCo president Arthur Aguilar earlied indicated it would take at least a year before a franchise is issued to the winning concessionaire.

Aguilar said the issuance of a franchise will take longer because the May 2007 elections will pave the way for a new Congress.

The issuance of the franchise would complete the bidding process and will allow the new owner of TransCo to start paying the concession fee.

On Oct. 29, 2006, PSALM – the overseer of the privatization of TransCo and other state-owned power assets – announced that three investor groups have passed the pre-qualification criteria set for the 25-year concession of TransCo.

Based on the proposals, the technical partners of the three groups are currently operating transmission systems that are at least three times bigger than that of the Philippines, and with peak demands at least two times higher.

The bidding of TransCo’s concession contract is set on Dec. 20 this year.

Concepcion said he will also ask the President to use the full power of her office to uphold the right-of-way of the transmission lines, in the same manner the North Rail Transit’s right-of-way problem was addressed.

According to Concepcion, he supports the move of the President to fasttrack the privatization of the National Power Corp. (Napocor), as only 232 megawatts (MW) of plant output have been privatized to date. 

The proceeds of the privatization, Concepcion pointed out, would reduce the government’s budget deficit, allowing it to channel more funds to infrastructure and social services. 

To date, there have been only eight power plants successfully privatized, bringing the level of privatization at a mere 2.7 percent of total capacity up for sale. By end-2006, this is expected to increase to 11 percent and ultimately reach to target 70 percent by next year.