San Miguel still keen on Angat contract

MANILA, Philippines - Diversified conglomerate San Miguel Corp. remains interested in operating and maintaining the 218-megawatt Angat hydropower plant in Bulacan despite thorny issues that continue to delay the turnover of the facility to its foreign partner, K-Water Resources Corp. of Korea, its top official said.

“Yes, (we are still keen on Angat),” San Miguel president and chief operating officer Ramon Ang said in a text message when sought for comment on the company’s continuing interest in the facility.

The Power Sector Assets and Liabilities Management Corp. (PSALM), the government corporation tasked to privatize state-owned power assets, said there are still issues being addressed before the deals final closing.

“There are pending issues preventing closing,” PSALM president and chief executive officer Emmanuel Ledesma, Jr. said yesterday.

He declined to elaborate on the issues but said PSALM is targeting to close the sale by Sept. 1.

He also explained that the lower purchase price of the facility is due to the capacity testing of the plant’s main Units 2 and 4 as provided under the sale agreement.

K-Water’s bid lowered to $439 million from the original $440.88 million in 2010, data from PSALM showed.

PSALM sold the plant to K-Water which is working on securing a $500-million bridge loan from the Korean Exim Bank for the takeover.

PSALM issued the certificate of effectivity (COE) to K-Water in September last year and had targeted to close the sale within 270 days from the issuance of the COE. It conducted a bidding for the facility in 2010.

K-Water topped the bidding but was unable to take over the plant due to thorny issues including court hurdles raised by non-government organizations (NGO) on the foreign takeover of a power asset.

The Supreme Court last year upheld the privatization of the power plant but K-Water had negotiated with the government for a lower price tab on the facility, saying it wanted the same level of benefits expected in its 2010 bid.

The privatization of Angat, once completed, would be the first successful power asset sale under the Aquino administration, as mandated under the Electric Power Industry Reform Act of 2001.

K-Water is optimistic that its investment in Angat is only the beginning of future projects in hydropower.