Transco public bidding delayed to early next year
Friday, October 15, 2004
By MYRNA M. VELASCO
The schedule of public bidding for spinoff National Transmission Corporation (Transco) is likely delayed until first quarter next year as the privatization committee has yet to get hold of an independent appraisal so it would have a more solid basis on what should be deemed as acceptable price for the 25-year concession contract being offered to investors.
Transco president Alan T. Ortiz relayed that President Arroyo’s mandate was for the privatization team to still pursue the award of the concession contract by December this year; but he noted that if schedules needed to be stretched, the bidding could be deferred until January next year.
That could be the option to be taken, he has sounded off; though he has been assuring that the Power Sector Assets and Liabilities Management Corporation (PSALM) is still tugging its way hard so it can meet the December deadline.
For the proposed third party valuation, Ortiz said solicitation of tenders would be out soon; noting that the target would be to complete it between March to April next year.
Although PSALM has not set any price selling yet for Transco, it was emphasized that based on internal revaluation for the company; its asset base was reported to have been at R128 billion or roughly US$3.0 billion to-date.
Meanwhile, Ortiz averred that the recent decision of the privatization committee to offer the transmission firm via public bidding was hinged on the ground that the Executive Branch would want to make sure that the process would not have any Congressional or legal backlash later on.
This early, several legislators have already raised alarm that a negotiated deal with the interested investors may eventually raise some questions; especially on concerns of transparency and the terms of reference to which the award has been made.
But the change of tack in the privatization mode has also exasperated some prospective investors, specifically Electricity Generating Authority of Thailand (EGAT); which has been claiming that it has tendered the highest price offer at the closing of submission last October 6.
Energy officials, however, clarified that what EGAT claims as its price offer cannot be construed as the specific amount that it really wants to pay for the assets; because it is just one of the assumptions it has put forward.
EGAT’s move of making public its tender has also taken aback some energy officials; because they have always believed that even at that stage of the talks, the parties are still bound by the confidentiality agreements signed earlier.
Meanwhile, Energy Secretary Vincent S. Perez reiterated that the government appreciates the time and effort that investor groups devoted to the discussions on the privatization of operations of Transco.
It was likewise sounded off that the Philippine energy officials understand the rigorous process that these investors have to go through again, especially in getting the go-signal from their principals at their head offices; but they noted that the privatization committee has to take such tough decision because they do not want to run the risk of having the Transco contract voided or nullified after the award
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