San Miguel dues to PSALM on Ilijan asset swells to P12.3B

by Myrna Velasco – July 19, 2016

from Manila Bulletin

The total dues of a San Miguel Corporation (SMC) subsidiary to the Power Sector Assets and Liabilities Management Corporation (PSALM) on the 1,200-megawatt Ilijan gas-fired power asset already swelled to P12.3 billion.

That has been based on continuous billing of PSALM to South Premiere Power Corporation (SPPC), the corporate vehicle of SMC that serves as the Independent Power Producer Administrator (IPPA) of the contracted capacity of the Ilijan plant.

SMC just recently revealed that it is currently in talks with Manila Electric Company (Meralco) on shares sell-down of SPPC — with about 49-percent equity being offered to the Pangilinan-led power utility firm.

Nevertheless, Energy Secretary Alfonso Cusi already indicated to media that before any ‘sale arrangement’ would be carried out on the Ilijan asset, the government would want to pursue first the outstanding obligations of SPPC to PSALM.

According to a highly placed government source, the P12.3 billion updated billing stretches from June 2010 to April 2016.

That accounts for portion of the cost that SPPC has been contesting based on its IPPA agreement with PSALM.

It was explained that if calculation would be based on the undisputed amount from December 2012, that will already be at P7.8 billion from the original P6.0 billion that was the trigger of SPPC’s filing of a case at the regional trial court.

The initial amount disputed by the San Miguel subsidiary firm was at P4.6 billion until negotiations on payments bogged down.

It was further noted that the amount represents “the accumulated shortfalls in San Miguel’s payment of its monthly obligation to date.”

The case is still pending for resolution by the Courts; and talks between SPPC and PSALM have not also moved from then on the resolution of the former’s outstanding obligations relating to the contracted capacity of the Ilijan plant.

 

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