Tuesday, April 11, 2017

Aboitiz joint venture expects Davao bulk water project to start in July

Posted on April 05, 2017

ABOITIZ Equity Ventures, Inc. (AEV) and its joint venture partner target to start in July the construction of a P12-billion bulk water supply facility in Davao City, with the goal of providing services to the area by end 2019, its finance chief said.
 “The funding is ready. It’s really just finalizing the permits. We want to make sure everything is set before we start building,” AEV Chief Financial Officer Manuel R. Lozano told reporters on Monday.

Apo Agua Infrastructura, Inc., a joint venture between AEV and JV Angeles Construction Corp., in mid 2014 won the right to build the facility for the Davao City Water District, but the project was delayed because of the lengthy government permitting process.

Set to produce 300 million to 350 million liters of water per day, the project will source water from the Tamugan River and require close to 50 kilometers of pipes to reach the facility.

Mr. Lozano said the project is “not hard to build” except for the construction of the road to the water treatment facility, which needed coordination with the Department of Public Works and Highways.

“That’s why it takes time, because you need to get the right of way, you need the permits, then some of those land conversion. So that’s gonna be another issue,” he said.

Construction will take around two-and-a-half to three years and completed ahead of the Aboitiz group’s end-2019 target operation date.

Asked about the firm’s decision to bid for the Davao project, Mr. Lozano cited the need for accessible water supply in a region where 63% of consumers depended on deep wells.

“The area of Davao really needs water... so they’ve always been looking for more resources,” Mr. Lozano said.

In the next 12 months, the Aboitiz group expects the completion of three major power projects, which required investments of up to P59 billion.

By the fourth quarter this year, a 200-MW coal-fired power plant in Pagbilao, Quezon is scheduled to be completed. The project is under AEV’s power development arm Aboitiz Power Corp., whose unit Therma Power, Inc. partnered with TPEC Holdings Corp. to form Pagbilao Energy Corp.

In Cebu, another coal-fired plant is being constructed by Therma Visayas, Inc., a joint venture of Aboitiz Power and Vivant Corp. It should be completed by the first quarter of 2018. The plant has a capacity of around 300 MW.

The group’s 68-MW hydroelectric power plant project in Bukidnon through AboitizPower’s unit Hedcor, Inc. is targeted for completion in the third quarter of the year.

By the second quarter, AboitizPower’s joint venture through Aseagas Corp. is set to finish the commissioning stage of an 8-MW biofuel plant, its first using the technology.

“It’s a bit of a challenge because we’ve never done that kind of power plant,” Mr. Lozano said. “But it’s a good start. We’ll probably have more of these types of projects.”

The projects will bring AboitizPower’s total capacity to around 3,500 MW.

Mr. Lozano said AboitizPower was also looking into renewable resources as it sees solar energy’s potential to become one of the main sources of power over time.

“Aboitiz Power is looking for ways to scale this project,” he said, adding that solar farms can be built immediately for the end user.

The group has a 60-MW solar power plant in San Carlos, Negros Occidental, which became operational in March 2016.

Mr. Lozano said the group’s property arm Aboitiz Land, Inc. is interested in putting up developments powered by solar rooftops.

“If those markets are open for rooftop-type of solar... this will reduce costs, make it cheaper because [it] will be directed to the customers,” he added. -- Arra B. Francia

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