Transco and Gencos

Cecilio T. Arillo March 20, 2020
https://www.manilatimes.net/2020/03/20/news/top-stories/transco-and-gencos/704475/

Ninth of a series
Former DoE (Department of Energy) secretary Vincent Perez, citing government’s inability to operate and maintain the country’s transmission project, had often stressed the importance of privatizing Transco (National Transmission Corp.). The government projected some P105-billion ($2.9 billion) in revenues upon completion of sale.

A Transco privatization committee was formed to oversee the competitive bidding and final awarding of contract. The bidding was expected to be well received by participating foreign investors who would take much interests in the first privatization attempt of government in the energy sector. The members of committee on privatization were representing officials from Transco, DoE and to Psalm (Power Sector Assets and Liabilities Management).

The committee scheduled the first bidding in August 2003. However, the committee had to announce another bidding failure because no investors showed interest in the deal. The government had been considering a negotiated bid with Singapore Power, the lone bidder.

The projected revenue accruing from Transco’s privatization became long-term consideration of the government. In the short-term, however, government needed to privatize Transco to be able to borrow again by issuing bonds. Perez deliberately failed to mention that Transco privatization was also an ADB (Asian Development Bank) conditionality for issuing a partial guarantee to NPC (National Power Corp.) through bond floatation which was needed for its 2004 operating expenses.

The government continued to implement its finalization of privatization plan for the Gencos (Generation Companies). Psalm proposed that the Gencos be privatized simultaneously with the Transco. So far, Psalm was able to bid out and award some of the NPC-owned generating facilities.