PSALM expects P100 billion from CBK privatization

MANILA, Philippines — The Power Sector Assets and Liabilities Management Corp. (PSALM) is expected to generate as much as P100 billon from the privatization of the 796.46-megawatt (MW) Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plant complex in Laguna, bolstering the cash position of the cash-strapped state firm.

“We could probably generate anywhere from P50 billion to P100 billion. That will help plug our deficit for next year,” Finance Secretary Ralph Recto, who also serves as chairman of the PSALM board of directors, said at the sidelines of the induction of the new officers of the Economic Journalists Association of the Philippines last week.

Recto said the CBK privatization would be a priority for PSALM this year.

He said the bidding is expected in the next few months, with its awarding eyed by next year.

The CBK hydroelectric power plant complex in is among the key remaining assets which the state-owned corporation has yet to privatize.

PSALM is the agency mandated by the EPIRA to handle the financial obligations of the National Power Corp. through the privatization of government-owned assets, collection of the proceeds and its effective implementation of its liability management program.

PSALM is seeking for the extension of its corporate life for another 30 years from the expiration of its original term in June 2026 subject to certain conditions, such as the completion of privatization of generation assets and IPP contracts within June 2026.

Recto said he is supporting extending the corporate life of PSALM, possibly for another 25 years.

“I think it should be extended. PSALM still has a lot of debts. It also has plenty of assets to be sold,” he said.

Also being discussed for potential privatization is the Agus and Pulangi hydroelectric power plants in Mindanao, according to the finance chief.

“There is an opportunity there. We’re open to privatizing that as well. Of course, we have to get the consent of the other stakeholders,” he said.

In the meantime, PSALM is looking to enter into a rehabilitation project first for Agus-Pulangi.

PSALM in May last year conducted a successful public bidding of the 165-MW Casecnan hydroelectric power plant, in which Fresh River Lakes Corp., a subsidiary of the Lopez Group’s First Gen Corp., emerged as the highest bidder.

PSALM and the National Irrigation Administration, as co-owners, formally turned over the possession of the Casecnan HEPP to Fresh River Lakes last month.