The Philippine Star 07/14/2006
The proposed mother-daughter compressed natural gas (CNG) station project of the Shell Group will push through within the year, an energy official said.
"Shell has indicated that they could be operational in six to 12 months, as they have already addressed all issues, " Department of Energy (DOE) director Mario Marasigan said.
But Marasigan admitted that the Shell Group is still firm on addressing the issues of security before it could proceed with the project.
"It’s the mother station that has safety issues that would be difficult to disregard. Safety is related to the provision of the technology, and there were components that had to be modified to address the issues on safety," he said.
At the same time, the DOE, in view of the unforeseen delay in the construction of CNG refilling stations, is urging the Shell Group to help shoulder the interest expenses incurred by bus operators who imported CNG-run buses.
"We are working out with the partners for the (CNG) program led by the DOE for policy, and Shell to provide assistance on how to cope with the cost of money. We intend to provide them with the cost of money until they are running. They requested for such assistance from the DOE," Marasigan said
The DOE official noted that bus operators borrowed around P2.5 million to P3 million from the bank which they have to pay interest.
Marasigan said the DOE bewails the fact that CNG, which costs less than half the price of diesel, could not be utilized at a time of high oil prices.
"In view of high oil prices, we regret the fact that we could not make use of the CNG-buses. Otherwise, the price difference between CNG (P14.52 per liter) from diesel (P36 per liter) could have been seen," he said.
According to Marasigan, CNG supply from PNOC’s San Antonio gas plant in Isabela is very limited and expensive because of the long hauling. PNOC’s CNG supply would run at around P65 to P70 per liter.
"We cannot use it for commercial operation. It (PNOC plant) does not have sufficient reserve to supply the 22 CNG buses," he said.
He said there are currently 22 CNG buses and 185 more buses committed by seven bus operators. DOE is targeting the use of 200 buses.
"There have been several bus operators that applied for accreditation, but we have to put on hold their applications. Actually, we have already exceeded the initially target of 200 buses for the pilot program. We cannot give more than 200 buses, since the program only targets 200 buses," Marasigan said.
Despite the delays, DOE is targeting a minimum of 2,000 buses to a maximum of 3,000 buses running on CNG in the next 10 years.
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The Philippine Star 07/14/2006
Mirant Philippines Corp., the local subsidiary of Atlanta-based Mirant Corp., said it will continue to operate normally as it remains committed to its employees and the communities it serves.
"We look forward to a smooth and orderly transition, in close coordination with the relevant government agencies until after our auction process is completed," Mirant Philippines chairman and president Jose Leviste Jr. said yesterday.
Mirant Philippines’ parent firm announced the other day that it will sell all of its remaining assets in the Philippines and the Carribean as part of its strategy to restructure its finances after emerging from bankruptcy protection.
Leviste said Mirant’s pullout from the Philippines will not mean it would not be continuing its commitment to the country. "Our Philippine assets will continue to operate efficiently and deliver on commitments to the government, our clients and our stakeholders," he said.
According to Leviste, the divestment decision is purely a business issue. "The recent announcement that Mirant plans to divest its ownership interest in the Philippines is a corporate decision reflective of our company’s desire to deliver results to shareholders by realigning our business strategy."
He said they hope Mirant’s decision will not impact on the Philippine economy as a whole. "We remain very optimistic on the Philippine economy and the future of the country. The government has taken great strides in making the country an ideal destination for foreign direct investments."
He said there are already a number of companies that have expressed interest in acquiring the company’s Philippine businesses, among them foreign groups like AIG, One Energy, Mitsubishi, China Light & Power, Korea Electric Co., Tokyo Electric, and Kyushu Electric, as well a local investors such as the Ayalas, the Aboitizes, the Lopezes and telecom tycoon Manuel Pangilinan.
"This clearly indicates confidence in the Philippines and its economy as a whole," Leviste said.
"With the steady increase in economic activity and the subsequent rise in demand for power, we anticipate exciting and positive developments to take place in the industry in the coming years," he said.
Mirant Philippines Corp. is the country’s largest privately-owned power producer. Its assets are valued at approximately $2 billion.
With the sale of the assets, Mirant said these businesses will be regarded as "discontinued operations" starting the third quarter of 2006.
Once approved, the sales are expected to close by mid-2007. As Mirant generates cash from these sales, it plans to continue returning cash to its shareholders while maximizing the value of its net operating loss carryforwards.
Mirant has ownership interests in three generating facilities in the Philippines: the 1,218-megawatt Sual, the 735-MW Pagbilao and a 20-percent stake in the 1,500-MW Ilijan. The Philippine businesses contributed $370 million in gross earnings for the parent firm in 2005, or about half of total global earnings.
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The Philippine Star 07/13/2006
Atlanta-based Mirant Corp. will sell all of its remaining assets in the Philippines and in the Caribbean as part of the company’s overall financial restructuring coming off its recent emergence from bankruptcy.
Mirant Philippines Corp., the local subsidiary of Mirant Corp., is the country’s largest privately-owned power producer. The sale of its assets would raise approximately $2 billion for the parent firm.
A well-placed industry source said among the possible foreign buyers of Mirant assets in the Philippines are AIG, One Energy, Mitsubishi, China Light & Power, Korea Electric Co., Tokyo Electric, and Kyushu Electric. Potential local investors, on the other hand, include the Ayalas, the Lopezes, the Aboitizes, and telecom tycoon Manuel Pangilinan.
"Mirant is commencing auction processes to sell its Philippines and Caribbean businesses," the US energy firm said in a disclosure to the New York Stock Exchange.
Mirant said the sale, to be carried out through "an auction process", will still have to undergo regulatory and other approvals and consents.
Industry observers said the auction of Mirant ‘s assets will be far more attractive than the sale of the National Power Corp.’s power generating assets and could affect the ongoing privatization of the state-owned power facilities. "Competition for potential buyers will be tough as Napocor and Mirant assets would be put on the auction block at the same time."
With the sale of its assets, Mirant said these businesses will be regarded as "discontinued operations" starting the third quarter of 2006.
Mirant has tapped Credit Suisse as its financial advisor for the sale of the Philippine businesses while JPMorgan will serve as financial advisor for the sale of the Caribbean businesses.
Mirant has ownership interests in three power generating facilities in the Philippines: 1,218-megawatt Sual, the 735-MW Pagbilao and a 20-percent stake in the 1,500-MW Ilijan. The Philippine businesses contributed $370 million to the parent firm’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in 2005.
With its decision to sell its Philippine businesses, Mirant has likewise adjusted its plan to recapitalize. The new recapitalization scheme will now consist of a $700-million term loan for which Mirant has obtained a commitment from Credit Suisse. The term loan will be prepayable at par.
Energy Secretary Raphael P.M. Lotilla said Mirant’s decision to sell its prime assets was not entirely unexpected given the financial condition of the mother company in the US, which has prompted the latter to come up with a strategic plan to enhance shareholder value after emerging from bankruptcy protection in the US in January.
A few months ago, Mirant Philippines had already started divesting its assets by selling its entire Visayas-based power plants to Metrobank Group’s Global Business Holdings Inc. Prior to the sale, Mirant Philippines owned 50 percent of Mirant Global Corp., a joint venture company, with the balance held by Global Business Holdings and First Metro Investment. Mirant Global operates the Toledo coal and diesel-fired plants in Cebu, the Panay diesel power plant in Iloilo City, and a Mindoro diesel plant.
Lotilla said the Philippine government, for its part, is ensuring that the buyers of these assets are qualified to perform the obligations of Mirant Philippines to Napocor, which include the buyer’s maintenance of the IPP (independent power producers) contracts attached to the assets on sale.
The energy official added that the government still believes that operations in these plants remain profitable and looks forward to keen interest among investors.
Lotilla also pointed out that the pull-out of Mirant’s businesses will not affect the country’s economic condition.
"Higher expected economic growth supported by rising foreign direct investments demonstrates that investor confidence remains intact and will help sustain the profitability of these plants," Lotilla said.
"Investors remain upbeat on the country’s investment climate following an improved fiscal position arising from the surplus registered in April, strong macroeconomic fundamentals and better-than-expected first quarter performance of corporations," he said.
It could not be determined though if the buyers of Mirant’s assets will continue the commitment to help the government in its rural electrification program. Late last week, Mirant and the Department of Energy signed an electrification project which aims to energize 55 barangays in Mindanao. Mirant has committed to energize 500 barangays nationwide up to 2009.
On the sale of Mirant‘s plants in the Visayas, Lotilla said the entry of new investors unsaddled by Mirant’s financial woes has helped make prospects for expansion of generating capacity in the Visayas more realizable.
"There is a sense of excitement in the power sector generated by Mirant’s decision to sell its businesses in the Philippines. Beyond acquiring Mirant’s Philippine assets, major international and domestic players see new opportunities for expansion. The announcement has ended the uncertainty hanging over Mirant’s participation in new power projects. Hobbled by financial challenges, the US mother company of Mirant is not in a position to finance expansion projects in the Philippines. But other major players who are not suffering from such a handicap see their possible acquisition of Mirant’s Philippine assets as a take-off point for acquiring additional generation capacity either through new or expansion projects or the acquisition of existing plants and assets of Napocor," Lotilla said.
Lotilla noted that the most recent proof that ownership changes like this have an overall positive effect is Mirant’s sale of its assets in Panay and Cebu in the Visayas. The new owners led by Metro Global are looking at additional projects which would support the economic and power demand growth in these two major islands, he said.
He added that the transfer of the Caliraya-Botocan-Kalayaan (CBK) generation plant by its operators which included Argentine firm IMPSA, to two very reputable Japanese companies Sumitomo and J-Power also provides a good example. "The CBK joint venture is now well-positioned to build additional capacity and to acquire Napocor assets."
In the same disclosure, Mirant said it will also undertake a "Dutch auction" tender offer for up to 43 million shares of Mirant’s common stock for an aggregate purchase price of up to $1.25 billion.
Mirant’s shareholders will be given the opportunity, subject to certain conditions, to sell all or a portion of their shares of Mirant common stock to the company at a price not less than $25.75 and not more than $29 per share. The tender offer will commence tomorrow and will be funded through a combination of cash on hand and cash distributed to Mirant upon completion of a term loan to be entered into by Mirant’s Philippine businesses.
Proceeds for the tender offer will come from available cash on hand of $885 million and cash to be distributed to Mirant upon completion of the $700-million term loan to be entered into by Mirant’s Philippine businesses. The remainder of the term loan will be used to pay off existing debt in the Philippines.
Aside from the Philippine businesses, Mirant will also be selling its net ownership interest in the Caribbean which comprises an aggregate 1,050 MW. The ownership includes controlling interests in two vertically-integrated utilities: 80-percent interest in Jamaica Public Service Co. Ltd. and 55-percent interest in Grand Bahama Power Co. Mirant also owns a 39-percent interest in the Power Generation Co. of Trinidad and Tobago (PowerGen), and a 25.5-percent interest in Curacao Utilities Co. In 2005, the Caribbean businesses contributed $156 million in adjusted EBITDA.
"Our strategic plan reflects our continued commitment to enhance shareholder value, both through the return of cash to our shareholders and through our continuing US business," Mirant chairman and chief executive officer Edward R. Muller said.
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The Philippine Star 07/12/2006
The Energy Regulatory Commission (ERC) has adopted new rules for the competitive retail power market in preparation for open access.
The commission said it has issued the so-called Code of Conduct for the Competitive Retail Market Participant (CRMP) which include the retail electricity suppliers (RES), the local RES, the distribution utilities (DUs), entities duly authorized to operate in the economic zones, and the contestable market.
"The ERC adopted the Code of Conduct to gain the confidence of electricity consumers in the retail electricity market and to ensure non-discriminatory access to regulated electricity services," ERC chairman Rodolfo B. Albano Jr. said.
The code sets the standards of behavior in marketing electricity service at the retail level.
Albano said the new code will also detail the marketing responsibilities and contractual obligations of the participants, as well as the complaint handling procedures for customers.
Under the code, the participants and their representatives are enjoined to observe confidential handling of information provided by the customer in connection with his application for electricity service.
The code will also require the issuance of a disclosure statement to the customer to ensure honesty, fairness and transparency by the competitive retail market participants in dealing with the customer.
In marketing its services, the RES, among others, must observe truthful advertising; avoid misleading the customers; provide the contact information of the ERC in marketing collaterals and advertisements to allow a customer to make clarifications on the information contained therein; and have marketing representatives with proper identification, full product knowledge and who are well-informed on the code and factual in his sales presentation.
"The ERC hopes that the electricity providers participating in the competitive retail electricity market will faithfully comply with the code to gain the trust and confidence of the end-consumers," Albano said.
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The Philippine Star 07/12/2006
Electricity Generating Authority of Thailand (EGAT) will no longer be bidding for the National Transmission Corp. (TransCo) this September, a reliable industry source said.
"They do not believe in this kind of exercise. Besides there are conditions which they perceive to become a problem in the future," the source said.
The source said one of the concerns raised by prospective bidders of TransCo is the condition within which the winning bidder will apply for its own franchise.
"It would be a problem. It would be very expensive especially if the application will come on an election year unless the winning bidder will have lots of money to spare," the source pointed out.
Another possible problem, the source said, is the 60-40 percent ownership sharing between Filipino and foreign bidders.
But the source admitted that EGAT’s former Filipino partner will still hold discussions this week to mull their other options.
"They would meet to see if they would still be bidding for TransCo. They want to make sure that they would still have time to negotiate with new partners," the source said.
According to the source, the former Filipino partner of EGAT, will now be tapping a foreign fund manager as its new partner. "We cannot disclose yet but this would involve a foreign bank."
EGAT was earlier reported to have submitted the highest bid for TransCo when the Power Sector Assets and Liabilities Management Corp. (PSALM) auctioned off the concession contract of the transmission highway about two years ago.
PSALM, in-charge of disposing Napocor generation and transmission assets, earlier said there are seven groups eyeing to participate in the bidding of TransCo this September.
Industry sources earlier said EGAT was reportedly be joined by Citra of the Salim Group to handle the technical aspect while Northeast Development and Acquisition Corp. (NEDAC) will be in charge of the financial side.
Sources said another group that signified interest for TransCo consists of Japan’s Tokyo Electric Corp. and US-based Trans-Electric (for technical); and San Miguel Corp. and Morgan Stanley (for financial).
The other group, sources said, is reportedly composed of First Pacific Co. Ltd. (financial) and Trans-Grid of Australia (technical).
Another group is composed of Hydro Quebec for the technical aspect and SNC Lavalin to be in charge of the financial requirement of the consortium.
Singapore Power Corp., the lone bidder during the two previous biddings conducted by PSALM for TransCo, has reportedly decided to take the sideline this time. However, Concepcion Industries, which has plans of bidding for TransCo, has reportedly been wooing SPC to provide its technical expertise to the group.
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The Philippine Star 07/11/2006
The Department of Energy (DOE) will draw up new guidelines for small-scale and non-power application of geothermal energy, the country’s top energy official said.
Energy Secretary Raphael P. M. Lotilla said this is part of the government’s overall thrust to increase the country’s renewable energy-based capacity by 100 percent in the next 10 years.
These non-power applications include the development of geothermal sites of state-owned PNOC-Energy Development Corp. (PNOC-EDC) into eco-tourism spot.
"Included in our long-term plan is to consider all of our geothermal facilities as possible sites for eco-tourism projects of the government. The Department of Tourism can coordinate with us, for instance, by putting up hot spring resorts and mud-stream massage facilities," PNOC-EDC president Paul Aquino said.
Another non-power related activity that could be done in the geothermal sites is "drying".
"The heat of the return condensate could be utilized for drying purposes (dried food, fish)," Aquino said.
Aside from the non-power related geothermal development plan, the DOE will also push for the optimization of existing geothermal facilities to attain the goal of increasing the geothermal power capacity of the country.
The government will also offer geothermal sites for development to prospective investors through the Philippine Energy Contracting Rounds (PECRs).
Based on the Philippine Development Plan, the DOE will increase the capacity of geothermal power by another 1,200 megawatts (MW) by 2013 from the existing 1,923 MW capacity.
Over the next 10 years, the country will need over P87 billion for geothermal sector. Out of the total amount, P49 billion will come from the government and the remaining P38 billion expected to be contributed by private investors.
PNOC-EDC operates nine geothermal steamfields with an aggregate capacity of 1,145 megawatts accounting for about 60 percent of the country’s total installed geothermal capacity. Since its venture into the power generation business in 1997, it has significantly increased its contribution to the country’s overall power generation.
The company presently operates four power plants, which were built through the build-operate-transfer scheme. These are in Bacon-Manito in Luzon, four in Leyte, two in Southern Negros and Mt. Apo in Mindanao.
In addition to the sites already being developed by the company, the DOE estimates that 35 sites with up to 1,600 MW of potential capacity remain available for development in the Philippines.
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The Philippine Star 07/10/2006
Mirant Philippines Foundation Inc. has signed an agreement with the Department of Energy (DOE) for the electrification of 55 remote barangays in the provinces of Aklan, Masbate, Northern Samar, and Palawan using solar photovoltaic (PV) systems.
Jose Leviste Jr., Mirant Philippines chairman and president, said the memorandum of agreement (MOA) will also involve the Taytay sa Kauswagan, Inc., an Iloilo-based microfinance institution.
"Mirant has partnered with the DOE to undertake this World Bank and Global Environment Facility-supported rural power project (RPP) using a sustainable solar market package (SSMP) approach," Leviste said.
Leviste said the program, dubbed Project Access (Accelerating Community Electricity Services Using Solar), supports the goal of President Arroyo’s administration to achieve full barangay electrification by 2008.
"It is an honor for Mirant to partner with the DOE, headed by Secretary Raphael Lotilla, and other private sector groups on such a worthwhile project that will spread the benefits of electrification to our fellow citizens in the remotest parts of the country," said Leviste. "This will certainly jump-start local economic activity and improve the quality of life of its beneficiaries."
According to Leviste, Project Access is consistent with the commitment of US-based Mirant Corp.’s chief executive officer Edward R. Muller to President Arroyo of continuing support to the country’s rural electrification initiative.
Based on the MOA, Mirant Philippines Foundation along with the World Bank will provide the initial resources needed to start the project.
The DOE, on the other hand, will be in charge of implementing the program and overseeing the technical component.
To date, Mirant, in partnership with the DOE, has energized over 1,000 barangays nationwide in 33 provinces, benefiting over 1.5 million individuals at a cost of over P1 billion under its Barangay Electrification Assistance for Countryside Development program (Project Beacon).
Mirant Philippines, a wholly owned subsidiary of Atlanta-based Mirant Corp., is the largest private producer of electricity in the Philippines with over 2,000 megawatts of generating capacity. It owns and operates the 1,218-MW Sual power plant in Pangasinan and the 735-MW Pagbilao power station in Quezon. It also has a stake in the 1,200 MW Ilijjan natural gas project in Batangas.
Energy Secretary Raphael P.M. Lotilla, for his part, is urging other independent power producers to follow the lead of Mirant.
"We are very pleased with Mirant for their commitment to support Project Access by providing the needed assistance for the electrification of these 55 barangays. We encourage other private companies to follow the lead of Mirant to further help enrich the lives of our people living in the rural areas," he said.
Lotilla said Mirant will provide P55 million for the electrification of these barangays using the SSMP scheme, a component of the DOE’s Rural Power Project.
Taytay sa Kauswagan, on the other hand will provide credit and micro financing facilities amounting to P30 million to qualified consumers for the acquisition of solar PV systems.
With the signing of the MOA, it is hoped that this kind of project could be duplicated in other unenergized remote areas as Lotilla noted that it is becoming more and more difficult to reach the target of energizing 49,145 barangays in the country due to government’s financial constraints.
As of May this year, the country’s barangay electrification level stood at 94.04 percent. With the concerted efforts of the government and the private sector, the provision of electricity services to the remaining 2,500 unenergized barangays will be completed by year 2008, to achieve the government’s target of 100 percent barangay electrification level.
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The Philippine Star 07/10/2006
The government will not deduct the $14.14-million performance bond from the $561-million purchase price of 600-megawatt Masinloc power plant in case the YNN Pacific Consortium Inc. and its partner Ranhill Berhad will decide to deliver the downpayment before Aug. 6, Energy Secretary Raphael P.M. Lotilla said over the weekend.
"That would not be part of the $561 million," Lotilla said. The energy chief did not elaborate.
In a related development, the Power Sector Assets and Liabilities Management Corp. (PSALM) served the notice of contract termination to YNN Pacific Consortium last Friday, July 7.
"In accordance with the (asset purchase) agreement, since YNN was not able to pay the upfront payment, rentals and option price to (PSALM) on or before June 30, 2006, we are hereby notifying YNN that PSALM is terminating the agreement," PSALM president Nieves L. Osorio said in a letter to YNN.
The effective date of the termination of the asset purchase agreement with YNN, Osorio said, will be on Aug. 6, 2006.
Osorio said there is no provision in the APA that prohibits YNN consortium from paying the downpayment before the notice of termination takes effect which is 30 days after it was served.
After collecting the $14.14-million performance bond from YNN Pacific, the PSALM board decided to issue the notice of termination of the contract for the sale of the Zambales-based coal-fired power plant.
Osorio said PSALM had adopted the necessary measures to ensure that the government’s interests and credibility were protected by requiring a performance bond and then forfeiting on it when YNN did not meet its deadline.
PSALM forfeited the $14.14-million performance bond after YNN failed to meet the June 30 deadline to deliver the $227.54-million upfront payment.
YNN submitted the highest bid of $561.74 million for the Masinloc thermal plant in Zambales.
The only other bidder, First Gen Corp., submitted a bid of $274.85 million, which was 30 percent below the government’s reserve price of $388 million and less than half of YNN’s bid.
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The Philippine Star 07/10/2006
The Manila Electric Co. (Meralco) is urging its customers to be wary of unscrupulous individuals volunteering to pay their electric bills for them.
Meralco issued this warning after an individual was nabbed issuing a stolen and fake manager’s check in paying for the bill of another customer.
"We received information that there are cases of persons preying on our customers who are usually outside the branch office. While the customers wait to pay their electric bills, they approach their intended victims, befriend them and volunteer to pay the customers‚ electric bills on the latter’s behalf. At times, these individuals pose as Meralco employees and offer discounts on the bill. After getting the money, these persons will pay the victim’s bill using a check with closed account or a fake or stolen managers’ check. The suspects will give the validated Meralco statement or official receipt to prove actual payment. However, these checks will eventually bounce causing the bill to remain unpaid. After a couple of days, the victim will realize that he has been cheated after receiving a notice on the returned check," Meralco vice president Elpi Cuña Jr. said.
Cuña clarified that Meralco has not authorized nor deployed anyone including its branch personnel to receive payments outside the branch office.
He added that customers must pay only at the Meralco branch office counters or through third party agents like Bayad Centers.
Another innovative way of paying electricity bills may be through the automatic debit arrangement (ADA). Through the ADA option, a customer may authorize his bank to debit the bill amount from his account on the due date and remit the payment to Meralco.
"In the event they are approached by strangers volunteering to pay their bill for them, I would advise our customers to immediately call the attention of our security people so that these individuals can be immediately accosted," Cuna said.
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The Philippine Star
07/10/2006
Several Spanish firms have expressed interest in participating in built-operate-transfer (BOT) projects in the areas of renewable energy and infrastructure following President Arroyo’s official visit to Spain.
According to Trade and Industry Secretary Peter B. Favila, who accompanied President Arroyo in her trip to Spain, several Spanish firms such as Isolux-Corsan, Pro-Intec, Dimetronics and Soluziona expressed interest in participating in the Light Railway Transit (LRT) extension.
Red Nacional de Ferrocarriles Espanoles (RENFE), Spain’s national railway operator; Construccion Y Auxillar de Ferrocarles (CAF) and Soluziona expressed interest in various railway projects.
Spain’s second largest bank, Banco Bilbao Vizcaya Argentaria (BBVA) is extending financing for several projects in oil and gas exploration, hotel and resort development, information and communications technology projects, port projects, energy and other infrastructure projects.
Soluziona, which already has investments in the country, urged other Spanish investors interested in participating in Official Development Assitance (ODA) projects in Asia to set up their base in the Philippines in view of the presence of the Asian Development Bank (ADB) headquarters in Manila.
Soluziona related how they started with five employes in 1995 and have since expanded to 350 employes with projects in energy, banking and information technology.
Soluziona remains confident in the Philippine business environment and intends to expand further in Asia with the Philippines as their base.
Soluziona will bid for the North Rail project and is also exploring a partnership with taipan and retail king Henry Sy for an integrated property development complex.
Soluziona is also interested in BOT investments in the Don Piyo Intermodal Station which will be a hub for intercity and provincial bus transport and track systems.
Isolux-Corsan expressed interest in BOT railway infrastructure and construction investment projects.
It plans to participate in the bidding for LRT Line 1 South extension from Baclaran to Cavite.
Pro-Intec is interested in BOT investments in the LRT Line 1 South and Line 2 West extension, the Laguindingan Airport and Mindanao Airport Development Project in Cagayan de Oro.
It will provide a technical study grant for an agricultural/industrial project in the Cagayan Export Zone Authority.
It is also proposing a technical study grant for the fabrication of oil drilling equipment in Subic.
RENFE is interested in participating in the Iligan-Cagayan de Oro Railway project and in the North Rail project.
It will fund a E 100,000 feasibility study.
CAF, a railroad construction company, is looking at a E 33 million funding for a feasibility study on the Philippine National Railways (PNR).
BBVA signed a Memorandum of Understanding (MOU) Burgundy Global Asset Management Corporation for E250 million funding contract for BOT projects in oil and gas exploration projects in Palawan, hotels and resort development, ICT projects and the development of Port Irene in Cagayan.
BBVA also signed a Joint Declaration with WinAce Holdings Philippines, Inc. for the conclusion of an agreement for a credit line of E280 million for infrastructure and energy projects.
However, the Spanish firms expressed their concern about delays in project approvals.
Favila, however, assured them and offered the assistance of the Department of Trade and Industry as a one-stop contact to help them cut across the bureaucracy.
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The Philippine Star
07/10/2006
Sinclair Knight Merz (SKM), an independent consultancy firm, has placed the net assets of the National Transmission Corp. (TransCo) at P149 billion as of end-2005, a company report showed.
Based on TransCo’s 2005 annual report, the company’s total assets reached P185.5 billon, an increase of P52 billion or 39 percent over 2004, mostly due to the revaluation of assets which was conducted by SKM.
The results of the revaluation were taken up in the books following the approval of the SKM report by the TransCo and Power Sector Assets and Liabilities Management Corp. (PSALM) boards.
SKM’s appraisal is crucial to stir up investor interest in the next round of bidding for TransCo’s privatization set this September.
The revaluation result was used by TransCo in determining its annual revenue requirement, maximum allowable revenue and effective transmission charges for the second regulatory period of 2006-2010.
The asset revaluation was in compliance with the requirements of the transmission wheeling rates guidelines of the Energy Regulatory Commission (ERC).
Net cost of assets used in operations accounted for 80.3 percent of the total assets.
Aside from the asset revaluation, various capacity additions such as Leyte-Cebu Uprating and transmission line and substation improvements caused the increase in utility assets.
The cost of uncompleted transmission lines, substations and other improvements was recorded at P20.09 billion or 10.8 percent of the total assets.
For the period under review, TransCo’s current assets were reported at P14.59 billion.
Power receivables account for 65 percent of these assets at P9.44 billion, consisting of collectibles for P3.04-billion transmission delivery service; P6.37-billion ancillary services and P29-million universal charge.
Total receivables from Manila Electric Co. (Meralco) amounted to P6.37 billion, 67 percent of which or P4.28 billion pertained to its overdue ancillary services accounts due to shortfall from its contract with the National Power Corp. (Napocor) from Sept. 26, 2002 to Oct. 25, 2004 plus imbalance charges.
The rest of the current assets consisted of P3.48 billion supplies for operation and cash and other assets of P1.66 billion. The P454-million deferred charges generally consisted of preliminary survey and investigation costs of transmission projects.
As of end-2005, the company’s net utility revenue improved by 0.3 percent to P24.29 billion from 2004’s P24.22 billion.
Total operating expenses was contained at P8.08 billion, lower by P994 million or 11 percent from a year-ago level of P9.07 billion.
The net operating income for the year under review is recorded at P16.2 billion, higher by 7.1 percent or P1.07 billion than the previous year’s level.
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