by Myrna Velasco – August 1, 2016
from Manila Bulletin
The amortization schedule on concession fees of the National Grid Corporation of the Philippines (NGCP) for the country’s transmission network will be revised on account of outstanding financial claims lodged by asset owner National Transmission Corporation (TransCo).
According to Lourdes S. Alzona, officer-in-charge of the privatization firm Power Sector Assets and Liabilities Management Corporation, “there is a need to re-adjust the amortization table of NGCP because it was established that it has outstanding dues with TransCo prior to its prepayment in 2013.
This was raised by the Commission on Audit (COA) on its report, stipulating that NGCP has outstanding obligations of R3.041 billion to TransCo, prior to exercising its prepayment option under the Concession Agreement.
The COA has prescribed though that should NGCP opts to voluntarily settle such obligations,” PSALM being the agency in-charge of the privatization of the transmission assets, “will just make the necessary adjustment in the recording of the prepayments made amounting to PR57.883 billion by deducting first its obligations with TransCo amounting to R3.041 billion before crediting the balance to deferred concession fees.”
That directive from COA along with the on-going talks with TransCo, Alzona said, will be their take-off point in seeking the re-calibration of the concession fee payments of NGCP.
She noted that NGCP initially contested the existence of such outstanding obligations. But since the company eventually agreed to settle portion of it, that was already deemed an “acknowledgment of the TransCo claims.”
“The take-away there is that NGCP already paid a small portion of the amount, so it means there’s really outstanding obligations – and in the first place, that should have hindered their prepayment,” Alzona explained.
But what is important to the government now, she pointed out, will be to collect the amount of dues lodged by TransCo. “Since the presence of outstanding obligations has already been validated, that will now trigger the adjustment on (NGCP’s) prepayment,” Alzona said.
As to the final reconciled amount, she emphasized that it is still being re-calculated and re-validated with TransCo. “It’s a matter of re-computing the amortization table because that will have impact on interest charges on the concession fees… what will happen there is that, we will revise the amortization table if we establish that the claim is valid, but the prepayment will stay,” she expounded.
Alzona said they are still firming up the amount with Transco,” then we will discuss with NGCP, and as a final step, we will get PSALM Board approval so we can revise the amortization table.”