Casecnan, CBK plants’ privatization becomes ‘uncertain’

by Myrna Velasco, 24 March 2015
from Manila Bulletin

The privatization of the 150-megawatt Casecnan  and 728MW Caliraya-Botocan-Kalayaan (CBK) hydropower plants may no longer happen under the Aquino administration, based on the timelines drawn up by the Power Sector Assets and Liabilities Management Corporation.

In a document culled from the company, it was stipulated that the planned appointment of independent power producer administrator (IPPA) for the Casecnan facility is still under continuous “study and evaluation.”

That was on account of anticipated legal hurdles that may eventually torment the private sector taker of the deal especially on the plant’s ownership arrangement after the expiration of its energy conversion agreement (ECA) as underpinned by the Build-Operate-Transfer (BOT) Law.

For the CBK hydro facility, PSALM’s recommendation is to already pass it on to the next administration.

But given the intricacies of government leadership changeover, future divestments of power assets may still be subject to fresh round of review by the incoming administration.

In its preliminary crafted timeline, the CBK’s supply contract privatization will be second semester of 2016 and with prospective contract award by first semester of 2017.

Within the year, it appears that the only asset with definite turn at the auction block is that of the bulk energy for the 559MW Unified Leyte geothermal power plant.

PSALM further noted that some facilities targeted for privatization will have their supply contracts expiring in the next few years, thus, divestment options are similarly being re-assessed.

These include the 30.75MW Benguet mini-hydro power facility of which contract will expire in 2018; and the 50MW Southern Philippines Power Corporation and 100MW Western Mindanao Power Corporation of which power supply pacts will subsequently lapse in 2016 and 2015.

At the reign of the current administration, it attempted to complete the divestment of all the remaining assets of the National Power Corporation – but it was not able to accomplish it.

Aside from delays, the privatization initiatives of PSALM were also riddled with controversies and impediments that are either of the private investors’ making or due to wobbly processes of the state-run asset seller firm.

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