Latest Stories


Sacrament of concession


Even after five long years since the government privatized the power transmission lines in the entire country, the private concessionaire —the National Grid Corporation of the Philippines, or NGCP—is still in the mood to spend a great deal of money.

According to recent reports, NGCP says that it is willing to remit in advance part of the concession fee to the government, amounting to between $1 billion and $2 billion.

At the same time, NGCP seems to be getting more aggressive in its capital investments in the transmission system.

In fact, the company still has pending applications with the government to upgrade various power lines and substations.

Back in 2008, the NGCP acquired the exclusive right to operate the power transmission lines of the government firm Transco, with a bid of almost $4 billion in concession fee, to be remitted to the government on a staggered basis.

But the Aquino (Part II) administration wants NGCP to prepay part of the remaining $2.7 billion in concession fee, since the government outfit PSALM, which manages the assets—and the huge debts—of Napocor, says it needs the funds now.

NGCP president Henry Sy Jr., known as Big Boy in business, who happens to be the eldest son and heir apparent of taipan Henry Sy—the richest man in the country today, according to Forbes magazine—recently told media that, yes, indeed, NGCP is willing to prepay a huge portion of the remaining $2.7 billion in concession fee.

The prepayment thus will be on top of the billions of pesos programmed by NGCP as capital investments in the country’s power transmission system.

Whew! Perhaps we can expect a more reliable power transmission system in the next couple of years—well, assuming of course that we have enough supply from the power generation sector?

From what I’ve heard, anyway, some applications of NGCP are still hanging before the Energy Regulatory Commission, or ERC, even for more major projects to address the increase in demand in certain areas, coming in particular from rural electric cooperatives.

In fact, by the end of 2013, NGCP is scheduled to complete new transmission lines, and complete the upgrading of a number of others, according to Big Boy Sy.

Sy said this in a speech at the recent annual general membership meeting of the Philippine Rural Electric Cooperative Associations Inc. (Philreca).

One of these projects is the Colon-Cebu transmission line that will benefit the people in Bohol and Panay Island, because it will reinforce the transmission backbone in Cebu that delivers power from the new coal plant there to the various electric cooperatives.

In particular, big users like the Visayan Electric Company (Veco), Mactan Enerzone Corporation, General Milling Corp. and the Waterfront Hotel and Casino will all benefit from the new NGCP transmission line.

Also due for completion by end 2013 is the so-called Balo-i-Villanueva-Maramag transmission line in Mindanao, which is the transmission backbone linking, finally, the northern and the southern parts of the island.

The overloaded transmission system in the southern part of Luzon is also undergoing a major upgrade, as NGCP increases the capacity of Lumban-Bay transmission line by four times, thus providing an alternate power highway in the fast growing areas in Batangas.

Here is good news to mining companies in Mindanao: NGCP will start soon the second circuit of the Butuan-Placer transmission project, serving the part of the island with huge mining operations paying billions of pesos in taxes to the government.

Also pending before the ERC are NGCP applications for the upgrade of the transmission system that will connect the various hydro power plants in Mindanao to the main grid, benefiting power distributors like Iligan Light and Power, plus of course heavy power users such as Mabuhay Vinyl, Treasure Steelworks and Platinum Group Metals Corp.

Question: Will those NGCP projects mean less power outages—or absolutely no brownout at all? At least the huge capital investments of NGCP will create stability in the power transmission system.

Whether or not NGCP has power to transmit, as I said, is another question.

Another matter of course is the problem of NGCP in its collection from customers, particularly the non-paying electric cooperatives, controlled basically by local politicians.

But then again, whoever said that any concession with the government is a walk in the park?

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , corporate inside stories , economy , News

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Enrile chief aide back in PH ‘to face charges’–report
  • Pakistan library named ‘bin Laden,’ as memory fades
  • US teacher fired over comment on black president
  • Magnitude-7.5 earthquake shakes Mexican capital
  • Title of new Hillary Clinton book: ‘Hard Choices’
  • Sports

  • Motivated LeBron James preps for postseason
  • Nadal ousted by Ferrer in Monte Carlo quarters
  • Pacquiao shorts in Bradley fight sold for P1.7M in LA auction
  • Ryu pitches Dodgers past Giants
  • Alonso sets the pace in Chinese GP practice
  • Lifestyle

  • Levine designs womenswear with help from fiancee
  • Gabriel Garcia Marquez, Nobel laureate, dies at 87
  • Ford Mustang turns 50 atop Empire State Building
  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • Entertainment

  • Myx TV premieres Asian American ‘docu-series’
  • A nutty finale for ‘Scandal,’ TV’s craziest show
  • EXO postpones release of mini album ‘Overdose’
  • ‘X-men’ filmmaker slams ‘fabricated’ sex attack claims
  • Singer Chris Brown’s bodyguard on trial in DC
  • Business

  • US commerce secretary spells out economic facet of ‘pivot to Asia’
  • Italy sells luxury state cars on eBay
  • Asian shares mostly up in quiet trade
  • Dollar up in Asia on US jobs data, Ukraine deal
  • Barbie doll has a problem
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • Multicultural flock marks Good Friday in San Francisco
  • Las Vegas ‘Pinoy Pride’ fest hails Filipino heritage
  • Marking Jesus’ journey on Good Friday
  • Filipina accomplice arrested for fake bills in Malaysia
  • DoH denies Filipino nurse no longer positive for MERS virus
  • Marketplace