Quantcast
Latest Stories

Breaktime

Sacrament of concession

By

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
Advertisement
Advertisement

News

  • Camilla’s brother dies in US after head injury
  • Luisita farmers storm DAR compound
  • Trillanes, Ejercito confident they are not in Napoles’ list
  • Easterlies to prevail in Luzon, Visayas
  • Lacson eyes P106-B ‘Yolanda’ rehab masterplan
  • Sports

  • Mixers trim Aces; Painters repulse Bolts
  • Donaire junks Garcia as coach, taps father
  • ’Bye Ginebra: No heavy heart this time
  • UAAP board tackles new rules
  • Baguio climb to decide Le Tour de Filipinas
  • Lifestyle

  • Photos explore dynamics of youths’ sexual identity
  • 12th Philippine Food Expo set at the World Trade Center
  • No tourist draw, Malang the croc will remain wild
  • The best flavors of summer in one bite, and more
  • Homemade yogurt, bread blended with pizza, even ramen
  • Entertainment

  • Sony developing live-action Barbie comedy
  • California court won’t review Jackson doctor case
  • Return of ‘Ibong Adarna’
  • Practical Phytos plans his future
  • In love … with acting
  • Business

  • Facebook profits triple as mobile soars
  • Insular Honors Sales Performers at Testimonial Rites
  • Apple increases stock buyback, will split stock
  • Cost-recovery provisions for affected gencos urged
  • This time, BIR goes after florists
  • Technology

  • Top Traits of Digital Marketers
  • No truth to viral no-visa ‘chronicles’
  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Viber releases new design for iPhone, comes to Blackberry 10 for the first time
  • Engineers create a world of difference
  • Opinion

  • Editorial cartoon, April 24, 2014
  • Talking to Janet
  • Respite
  • Bucket list
  • JPII in 1981: walking a tightrope
  • Global Nation

  • Filipinos in Middle East urged to get clearance before returning
  • PH seeks ‘clearer assurance’ from US
  • China and rivals sign naval pact to ease maritime tensions
  • What Went Before: Manila bus hostage crisis
  • Obama arrives in Tokyo, first stop of 4-nation tour
  • Marketplace