With lack of supply contracts, NPC privatization seen slipping to 2009
Thursday, September 14, 2006
By MYRNA M. VELASCO
The lack of supply contracts that shall be attached to the power plants being sold is seen as the ultimate hurdle that would delay the privatization of the National Power Corporation (NPC) by up to two years or until 2009.
Faced with that stumbling block, prospects of earlier implementation of open access or giving choice of electricity suppliers to customers, also gets dashed.
Documents from the Power Sector Assets and Liabilities Management Corporation (PSALM) has shown that if there are no supply contracts, the sale of operating power assets in Luzon and Visayas are likely to skid until 2009.
The 70 percent target of privatization that merit initial implementation of open access is seen getting accomplished by end-2008, which is at least a year delayed from PSALM’s previous timetable of 2007.
Based on PSALM’s evaluation, if there are no sufficient supply contracts, the level of assets’ privatization would only reach 10 to 15 percent until June 2007; and mostly hinged on the divestment of hydropower assets.
But by end of next year, the asset liquidation firm wants to complete privatization of at least 45 to 50 percent of the NPC assets in Luzon and Visayas.
On the other hand, if there are adequate power supply contracts, PSALM is expecting that disposal would move forward on a smoother pace; and privatization is seen completed by end-2008.
Under such more favorable scenario, targetted 70 percent divestment is anticipated a year earlier by end of next year. By June of 2007, the divestment level is also projected higher at 60 to 65 percent.
With the successful bidding of the 112-MW Pantabangan and Masiway hydropower assets last week, the government is pinning hopes that it can finally get headway in the divestiture plan.
This, however, comes with an admission that it remains a tough task for them meeting the target; noting that they would have to undertake and address several concerns so they could sustain investors’ interests to bid for the assets.
The 70 percent level of privatization is also being worked on diligently, as PSALM president Nieves L. Osorio noted that this serves as a crucial turning point for the introduction of open access in the industry; which most of the stakeholders are keeping a close eye on, with the aim that this will bring in competition and pulls the domestic power sector into full-blown deregulation and restructuring.
posted by philpower @ 12:44 PM,
