DOE eyes completion of power assets privatization in 3 years

by Myrna Velasco – September 19, 2016

from Manila Bulletin

The energy policy agenda of the Duterte administration intends to speed up the privatization of the remaining assets of the National Power Corporation (NPC) – with it eyed for completion in the next three years.

With assets’ divestment seen gaining fresh momentum next year, the Department of Energy (DOE) is targeting that the process will already culminate in year 2020.

The department said with a leap up in the privatization of the NPC assets, asset-seller Power Sector Assets and Liabilities Management Corporation (PSALM) will gain more leeway into winding down its obligations prior to the end of its corporate life in 2026.

And with the proposed accelerated timeframe on the disposal of the government-owned power assets, the DOE noted that there is also an urgent need to “complete the study on the privatization scheme of the Agus-Pulangui plants.”

This hydropower complex in Mindanao is one of the remaining major assets still due for divestment – although stakeholders have split perspective on the fate of the hydro facilities.

Many quarters in Mindanao want the hydropower plants retained under State ownership, but power industry players have been batting for their privatization so market competition could thrive in a level playing field.

PSALM previously penciled in that it could still rake in $3.2 billion in proceeds from the sale of the remaining NPC assets, including the planned sale of the 982-megawatt Agus and Pulangui hydro plants.

The state-run firm though is reviewing anew its privatization program as it proposes material changes in the disposal of some assets.

In particular, PSALM is studying buyout options for the capacities of the Caliraya-Botocan-Kalayaan (CBK) hydro plant and the 210MW Mindanao coal-fired power facility prior to placing them at the auction block for ‘direct sale’ to private sector takers.

PSALM Officer-in-Charge Lourdes S. Alzona has indicated that they will fetch higher proceeds if they would change the assets’ privatization to that track.

Another sphere that the energy department wants seriously studied would be on the disposal of the NPC’s real estate assets.

The department recommended the implementation of “as is, where is” privatization scheme for the real properties; while also instructing PSALM to settle remaining issues on untitled land.