ADB to extend $250-M loan to TransCo winner

The Power Sector Assets and Liabilities Management Corp. (PSALM) said the Asian Development Bank (ADB) will provide a standby facility of $250 million to the winning bidder of the 25-year concession contract of National Transmission Corp. (TransCo).

PSALM said ADB’s financial support will likely heighten interest of the five prospective bidder-consortia bidding for TransCo.

“The ADB offer is equal to the amount proposed by the World Bank early this year,” PSALM said.

In a disclosure to the Philippine Stock Exchange, San Miguel Corp. (SMC) said it has teamed up with US firm Texas Pacific Group and Malaysian company Tenaga Nasional Berhad to bid for TransCo.

“We confirm that SMC, through its subsidiary San Miguel Energy Corp., has formed a consortium with TPG Aurora B.V., a subsidiary of TPG and TNB Prai Sdn. Bhd, a subsidiary of Tenaga for its bid to acquire the 25-year concession to operate TransCo,” SMC said.

Monte Oro Grid Resources Corp. also confirmed that it had submitted prequalification documents for the TransCo bidding. Monte Oro, a company run by businessman Walter Brown, said it will team up with State Grid of China.

Meanwhile, the group of Metro Pacific Investment Corp. (MPIC) also disclosed that it formed Two Rivers Pacific Holdings Corp. to participate in the pre-qualification for the TransCo bidding in partnership with Terna-Rete ElettricaNazionale S.p.A. of Italy.

The MPIC-led group said it “would continue to evaluate the TransCo concession before making a decision to participate in the bidding proper.”

Early this month, PSALM has indicated that there were about 21 groups that expressed interest to bid for TransCo.

The prequalification documents were handed over to PSALM last Sept. 21, the deadline for submission set by the PSALM Privatization Bids and Awards Committee.

PSALM declined to identify the members of the five consortia, citing the confidentiality agreement between the government privatization arm and the prospective bidders.

The list of prequalified bidders will be released after the evaluation of documents is completed. The evaluation process starts immediately. This will include checking the veracity of the submitted technical documents to prove the existence of the bidders’ respective “Qualifying Electricity Transmission Systems.”

The second stage of the TransCo privatization process, the prequalification procedure, enables PSALM to assess the financial and technical capabilities of the investor groups interested in bidding for the TransCo concession. The procedure assures strict compliance with the provisions stipulated in the Electric Power Industry Reform Act.

The prequalification process is also conducted to ensure that only serious bidders with proven domestic or international experience as a leading transmission system operator will be qualified to participate in the formal bidding slated on Dec. 12, 2007.

Bidders for the TransCo concession must have a member or affiliate with experience in operating and maintaining electricity transmission systems comparable to that of the Philippines, consisting of not less than 6,000 circuit kilometers of transmission lines operating at 115 kilovolts (kv) or higher and including within it a system operating at not less than 230 (kv) and having a peak demand of at least 6,000 megawatts. The member of the prospective bidder who meets the technical pre-qualification criteria must have a net asset value or market capitalization of $500 million.