Government may spend P3 billion for Agus-Pulangi rehab

By Donnabelle L. Gatdula (The Philippine Star) Updated December 13, 2010 12:00 AM

MANILA, Philippines - The government may spend P3 billion to rehabilitate the Agus-Pulangi hydroelectric power plants.

Energy Secretary Jose Rene Almendras confirmed that since the hydro power plant complex will not be privatized next year as stated in the Electric Power Industry Reform Act (EPIRA), the government may end up allocating funds to support its operations.

Under the EPIRA, these two big hydro power complexes should be privatized 10 years after the law was passed in 2001.

“Agus-Pulangi was already resolved by Congress and it’s definitely on hold. Congress Energy Committee resolution states that it [Agus-Pulangi] is deferred until further notice by the said Committee,” he said.

The energy chief admitted that it would be the responsibility of the government, through the National Power Corp. (Napocor), the operator of the plants, to keep Agus-Pulangi running.

“In the meantime, we need to rehabilitate and fix up what we can in Agus-Pulangi. We’ve asked Napocor to find a way to bring it back to the 700-MW capacity that it once was,” he said.

For his part, Napocor president Froilan Tampinco said based on their estimates, the rehab program of the hydro power facilities could reach about P3 billion.

“For the rehabilitation works that needed to bring up additional capacity for our hydropower facilities in Mindanao, it will cost around P2 billion to put in an additional of about 100 to 200-MW capacity. But if we would like to add or uprate some of the facilities, for instance the Pulangi which will include the cost for dredging, then we’re looking at spending about P3 billion,” Tampinco said.

But the Napocor chief said the details of the rehab program are yet to be finalized.

“These things are being evaluated together with determining whether it would be better to do selective dredging as against just an overall dredging, which may not really put in positive or more capacities to the available water in the Pulangi River,” he said.

The financing for the rehab program, Tampinco said, would come from the Power Sector Assets and Liabilities Management Corp., an entity created under the EPIRA to handle the privatization and finances of Napocor.

“Since these facilities are part of the major grid capacities, it will have to be sourced out through PSALM,” he said.

Almendras, in earlier interview, pointed out that the decision not to put Agus and Pulangi in the auction block is triggered by the need to ensure a stable supply of power in that region.

The DOE chief believes that keeping these hydro power facilities in government’s hands would be more beneficial.

He said the right timing for the sale should also be taken into consideration.