Transco renews bid to tap Malampaya Fund to finance P60-billion power projects

By Lenie Lectura – August 28, 2017

from Business Mirror

The National Transmission Corp. (Transco) is proposing to tap the Malampaya Fund to undertake a number of transmission-line projects amounting to over P60 billion.

Transco President Melvin Matibag cited the following projects: the capital intensive Visayas-Mindanao interconnection project, which is estimated to cost as much as P52 billion; Bohol-Cebu interconnection project, P7.4 billion; and Antique to Mindoro interconnection project worth P2.6 billion. The state firm also expressed interest to complete the Panay-Negros interconnection project at a cost of P1.9 billion.

“The direction of Transco right now is to do all the interconnection projects,” said Transco President Melvin Matibag, who assured that taxpayers won’t shoulder a single centavo. Instead, he proposed, to tap the Malampaya Fund currently pegged at P193 billion.

However, Transco needs approval from Congress to utilize the Malampaya Fund because an existing Supreme Court (SC) order prohibits this. Tapping the Malamapaya Fund to finance the proposed interconnection projects would have to be in a form of legislation.

“We’re coming out with a position that the government will do it, Congress to allocate budget from the Malampaya  Fund,” said Matibag, who claimed that Congress “supports” his proposal.

Matibag has the backing of Energy Secretary Alfonso G. Cusi, who also raised the issue during a recent budget hearing. “It is more logical for the government to develop the transmission facilities. The government owns the transmission facilities, it makes sense for us to do it,” Matibag added.

A formal position paper is being drafted and will be submitted to Congress soon. “In principle, even the secretary of finance agreed to it and the secretary [of energy] also. If government will undertake it, the cost would be cheaper by at least 20 percent to  30 percent,” Matibag said.

Transco also proposed to undertake a redundancy the Visayas-Mindanao interconnection project. “I will not use submarine cable. There is a proposal to build a bridge connecting Mindanao and the Visayas. We can install the transmission cable via the proposed bridge from Leyte to Mindanao. It will be presented by the DPWH [Department of Public Works and Highways] to the president. We will be part of it,” Matibag said.

He cited another advantage if Transco will undertake these projects. Matibag said permitting process for these projects would be concluded sooner as per issuance of Executive Order (EO) 30, which streamlines the permitting processes for big-ticket energy projects and mandates strict timeframes for government agencies to act on applications forwarded to their offices.

EO 30, issued on June 30, states that concerned government agencies shall act upon applications for permits involving Energy Projects of National Significance (EPNS) not exceeding within a 30-day period. If no decision is made within the specified processing timeframe, the application is deemed approved by the concerned agency.

“It is the policy of the State to ensure a continuous, adequate and economic supply of energy. Hence, an efficient and effective administrative process for energy projects of national significance should be developed in order to avoid unnecessary delays in the implementation of the Philippine Energy Plan [PEP],” the EO stated.

Within the Department of Energy (DOE), permits for all energy projects are processed within 25 days. Securing a permit from the DOE, however, is only 10 percent of the entire permitting process.

According to Sen. Sherwin T. Gatchalian, also the chairman of the Senate Commitee on Energy, it takes 1,340 days to secure a permit, 359 signatures needed for the permits to be signed, and involves 74 different agencies, including the  DOE.

In order for an energy project to be considered among the Energy Projects of National Significance (EPNS), power generation and transmission projects must have a capital investment of at least P3.5 billion, significant contribution to the country’s economic development, significant consequential economic impact, significant potential contribution to the country’s balance of payments, significant impact on the environment, complex technical processes and engineering designs, and significant infrastructure requirements.