09 Dec 2007
The Power Sector Assets and Liabilities Management Corporation (PSALM) is ready to bid out the right to operate the National Transmission Corporation (TransCo) on 12 December.
“We are all set,” said PSALM President and Chief Executive Officer Jose C. Ibazeta, who stressed that only the right to operate TransCo through a concession, and not the corporation and its assets, would be bid out.
“This is the strategy approved by the President as early as five years ago, and the soundness of this privatization mode is affirmed by the consistent — even increasing — interest from potential bidders,” Mr. Ibazeta remarked.
“The concessionaire will have the exclusive right to operate TransCo’s business, but the government will retain ownership of the strategic transmission assets and, pending the award by Congress of a franchise to the concessionaire, will control the assets. The concessionaire will also be responsible for rehabilitating and expanding TransCo in accordance with the Transmission Development Plan and other guidelines set by the Energy Regulatory Commission,” he explained.
Aside from the privatization mode which secures government’s interest in TransCo, several mechanisms are in place to protect the public interest, Mr. Ibazeta pointed out.
“The concessionaire also needs to get a franchise from Congress to operate TransCo. The existing franchise for TransCo is not transferable. This means the concessionaire will go through further scrutiny before Congress before it can operate the transmission network,” he said. “The bidders are, thus, put on notice that their equity structure and their financial and technical capability will be subject to intense deliberation and evaluation.”
The winning bidder is given a year to apply for and obtain a congressional franchise prior to the grant of the concession.
Strategic Communications and Partnership Division |