No details yet on fund source for PSALM P85-B requirement

Business Mirror
TUESDAY, 10 JANUARY 2012 19:50 PAUL ANTHONY A. ISLA / REPORTER


STATE-RUN Power Sector Assets and Liabilities Management Corp. (PSALM) has yet to determine how to raise its P85-billion funding requirement this year, President Emmanuel Ledesma Jr. told reporters on Tuesday.


The PSALM official said they have an approved budget that indicates a deficit of up to P85 billion. “Depending on the outcome of our operations, PSALM may have to source up to P85 billion,” he added.


Ledesma attributed the deficit to be driven by its debt service, operational expenses on fuel and maintenance expenses, as well as independent power producer (IPP) obligations.


Maturing debts for the year amount to $1.7 billion, inclusive of principal, interests and IPP lease obligation.


But as the government plans to consolidate the liability management of government-owned and controlled corporations with the sovereign, Ledesma noted that the Finance department will determine and finalize the borrowing structure to fund the said P85-billion deficit.


Apart from direct borrowing through bonds or the syndicated loan market or on-lending from the Finance department, Ledesma said they are considering to accelerate the privatization of remaining plants as well as the appointment of an IPP administrator to liquidate the privatization receivables from the National Grid Corp. of the Philippines (NGCP), and to accelerate the sale of PSALM’s non-power assets such as real estate and paintings among others.


Ledesma said facilities scheduled to be privatized this year are the Malaya thermal power plant, four power barges and the Bataan decommissioned power plant.


He added that the IPP contracts to be tendered this year involve the contracted capacities of the Casecnan multipurpose hydroelectric plant in Luzon and the Luzon portion of the Unified Leyte A and B geothermal facilities.


Ledesma also disclosed that the outstanding receivables from NGCP amount to $2.85 billion.


PSALM earlier considered using the receivables from the concession contract of NGCP to lower the universal charge passed on to consumers.


Lawyer Julie Anne Domino, PSALM spokesman and corporate counsel, said the government wants to review all existing power contracts, and even the concession of the NGCP, to come up with a solution to do this.


For the next 15 years, Domino said PSALM would be able to collect a total of $5.87 billion, with interest from the concession contract, of National Transmission Corp. to the NGCP.


Domino said if they could sell the receivables ahead of the scheduled payment of the NGCP, this might help cut the universal charge.