April 14, 2016
from Business Mirror
BELEAGUERED electric cooperative Zamboanga City Electric Cooperative (Zamcelco) has caught the interest of Aboitiz Power Corp. and Manila Electric Co. (Meralco) for a possible takeover of its management and operation.
The mode of acquisition, the National Electrification Administration (NEA) said, would be done via an auction of an Investment and Management Contract (IMC).
“If they go for IMC, then we would definitely look at it,” said AboitizPower President and COO Antonio R. Moraza in a text message.
“We are always interested in new opportunities,” Moraza said.
Meralco Vice President and Head for Electric Distribution Development Office Ireneo Acuña, meanwhile, said a possible takeover of an electric cooperative’s management and operation would fast-track improvements in the distribution utility. At the same time, the Meralco official said this would bring the quality of service to the level consistent with the requirements of local residents and investors.
“Meralco believes the key to sustainable power supply is the presence of robust distribution utilities that can bring on board reliable and cost-efficient power suppliers and ensure delivery of this vital service to the consumer. If welcome and if of value, Meralco is willing to partner with local electric cooperatives,” said Acuña, in a text message, when sought for comment.
In 2014 Meralco took over the management and operations of Pampanga Electric Cooperative Inc. II (Pelco II), which supplies electricity to the towns of Guagua, Bacolor, Santa Rita, Lubao and Porac. This, after Meralco and Comstech Integration Alliance Inc. (Comstech) won the bidding for the IMC of Pelco II.
Under the 20-year contract, Pelco II will still own the cooperative, but Meralco and ComsTech will manage and operate it under the IMC.
The contract provides that Meralco and ComsTech will assume responsibility for the electric cooperative’s debts with the NEA and its power supplier.
Zamcelco’s outstanding debt as of December 2015 stood at P337 million, NEA Director for Public Affairs Judith Alferez said. Of the amount, P280 million is owed the NEA for the use of modular generator sets.
The term of the contract to take over Zamcelco is still being worked on, the NEA official said. “The terms of reference [TOR] are still being prepared by the consultant. The board issued a resolution engaging the services of a third-party consultant to come up with a TOR leading to IMC.”
Aside from the debts, Zamcelco is currently experiencing “institutional problems” between the board and its employees, Alferez said.
If bidded out successfully, Zamboanga City, which used to have up to eight hours of rotating power outages, would no longer suffer from scheduled daily brownouts. “There’s also the rotational brownout, which could be solved via the IMC auction.”