13 Dec 2007
The consortium of the Monte Oro Grid Resources Corp., Calaca High Power Corp. and State Grid Corp. of China emerged as the highest bidder for the 25-year concession of the National Transmission Corporation (TransCo), the country's sole transmission business, in one of the closest biddings conducted by the Power Sector Assets and Liabilities Management Corporation (PSALM).
"We are very happy about the successful turnout of the bidding exercise for TransCo. PSALM handled the privatization of the government's transmission business with utmost transparency and judiciousness," said PSALM President and Chief Executive Officer Jose C. Ibazeta. "We strictly implemented the bidding procedures and complied with the rules governing the selection of today's winning bidder."
Mr. Ibazeta acknowledged the support and assistance of other government agencies in the privatization of TransCo.
"We would not have gotten this far if not for the support of almost the entire Executive branch of government," he said.
The government's readiness for the TransCo bidding was the result primarily of the joint efforts of representatives of government agencies comprising the PSALM Board, namely, the Departments of Finance, Energy, Justice, Trade and Industry, and Budget and Management, the National Economic and Development Authority, and PSALM.
Monte Oro Grid offered USD3.950 billion for the concession contract, while the consortium of San Miguel Energy Corp., Dutch firm TPG Aurora BV and Malaysia's TNB Prai Sdn Bhd bid USD3.905 billion. Both bidder groups, which submitted their respective bids before the 12 noon deadline yesterday, 12 December, met the reserve price set by PSALM.
Monte Oro Grid is a wholly-owned subsidiary of Monte Oro Resources & Energy, Inc. (MOREI or parent company). It was incorporated in the Philippines on 29 August 2006 to invest and hold interest in shares of stocks of companies engaged or proposing to engage in infrastructure projects.
State Grid Corporation of China was established on the basis of a sum of enterprises and institutions formerly owned by the State Power Corporation of China. State Grid of China is a large-sized enterprise approved by the State Council to operate the business of power transmission, transformation, distribution and other assets of power grid.
Incorporated in the Philippines on 15 December 2006, Calaca High Power is in the business of operating, managing, maintaining, and rehabilitating energy systems and services for gas, steam and electricity.
Monte Oro Grid will be declared the winning bidder as soon as PSALM has verified the accuracy, authenticity and completeness of all the bid documents that the consortium had submitted. PSALM will then issue the Selection Notice to the consortium to signify that it is the winning bidder for the TransCo concession.
After the verification and validation process, the Direct Agreement, duly executed by PSALM, will be delivered to Monte Oro Grid as the highest bidder. The Direct Agreement is part of the technical proposal submitted and executed by the prequalified bidders. It sets forth the conditions precedent to the award of the concession and the execution and delivery of the concession agreement and other final transaction documents.
The commencement date of the concession will be finalized after the following conditions precedent have been both satisfied: (1) Congress has granted a franchise to carry out the concession; (2) PSALM has secured the consent of financial institutions and lenders of the National Power Corp. pertaining to (i) the transfer of transmission assets and all other assets and properties to TransCo as mandated by Section 8 of the Electric Power Industry Reform Act; (ii) the privatization of TransCo by way of concession.
"To ensure the expeditious and smooth commencement of the concession period, PSALM will assist the concessionaire in preparing and submitting an application for a congressional franchise for the operation of the public utility," Mr. Ibazeta pointed out.
"Our mandate is not simply bidding out and privatizing the generation assets and transmission, but ensuring that the interest of the Philippine government and its people is protected and upheld. We thank the bidders and appreciate their sustained interest and participation in this bidding," he concluded.
PSALM's privatization proceeds now total USD6.6 billion, including the sale of the 11 generation assets and the transmission business.
Strategic Communications and Partnership Division |