Government urged to sell all remaining Napocor assets

MANILA, Philippines - The country’s power producers are urging the government to sell all the remaining assets of the National Power Corp. (Napocor) to pave the way for true competition in the industry.

Philippine Independent Power Producers Association (PIPPA) president Ernesto Pantangco said while they laud the government’s continuing effort to privatize the assets of Napocor, this momentum should not wane.

“We continue to actively participate in several advocacies and I guess the first one is the continued implementation of the EPIRA and we think that number one, really, is the continued privatization of the Napocor assets,” he said.

He said there remains some items in the Napocor privatization that would have a great impact on competition in the power industry.

“We would like to see the privatization. If you look at Luzon, practically everything’s been taken care of in terms of the assets and IPPA (independent power producer adminstrators) contracts but if you look at Visayas, we still need to privatize Unified Leyte  because currently, despite the influx of the new coal-fired capacities, Unified Leyte still accounts for about 54 percent, which is still under government control. And we would like to see government go below the 30 percent threshold, which is applicable to all industries, to all participants,” he said.

Pantangco said there is also a need to auction the two remaining hydropower facilities complex in Mindanao.

“At the same time, although we are aware of the various sensitivities in Mindanao, we would still want to push for the privatization of the Agus Pulangi assets as well as the other IPPA contracts. Basically two major contracts, one is the Steag BOT, under IPPA and our Mindanao 1 and 2, and Mt. Apo with Energy Development Corp. (EDC), that’s still under contract with Napocor,” he said.

Earlier, Pantangco noted that privatization is still crucial to raise much needed capital for the power sector.

“We still think that privatization is still required in order to put in the much needed investments to rehab the power plants and to make them more reliable, so that’s why we’re still pushing for privatization of all the Napocor assets and contracts,” he said.

He said the privatization has also helped increase the generation capacities in the sector.

“This has been borne out of the fact that any power plant that private sector has taken over, there has been an increase in capacity to a reliable level plus new investments will be put in to further improve the installed capacities,” he said.

The Power Sector Assets and Liabilities Management Corp. (PSALM), created under the restructured Philippine electric power industry (Electric Power Industry Reform Act or EPIRA) in 2001, is tasked to manage, privatize and dispose of all existing generation assets, liabilities, real estate and other disposable resources of Napocor.