NGCP concession fee payment shortened

Manila Bulletin 
By Myrna M. Velasco 
Published: September 2, 2013 
With the remitted prepayment of $1.5 billion, the National Grid Corporation of the Philippines (NGCP) noted that it will be able to shorten its concession fee payments by 10 years.
As to the level of prepayment made, NGCP special adviser to the president Joseph Ferdinand Dechavez reinforced that the amount is $1.5 billion, although previous media reports placed it at $1.0 billion to $1.35 billion.
The peso equivalent of the concession fees prepayment as quoted by Power Sector Assets and Liabilities Management Corporation (PSALM) president Emmanuel R. Ledesma Jr. had been at P57.8 billion.
Dechavez qualified though that there are “contested amounts” which are continuously being threshed out by the parties – and that could sum up to roughly $300 million.
He further explained that their company frontloaded payments which should have been due at the tail-end of their 20-year financing arrangement with counterpart PSALM.
“We continue to remit our concession fee payments to PSALM biannually. As of end-June, our remittance was close to P7.0 billion. The advantage of the prepayment to us is, we can cut down by 10 years the duration of our payments of concession fees,” he said.
Yearly remittance of NGCP concession fees would range from P13 billion to P14 billion, based on records of both the government and the transmission firm concessionaire.
The NGCP executive stressed that they exercised their prepayment option under the Concession Agreement, and it was the principal portion of the $3.95 billion winning offer that was paid.
Since that was the coverage of the prepayment, Ledesma noted that “effectively, there is no discount factor applicable.”
He added that “NGCP paid the nominal amount of the principal from January 2014 to January 2024.”
The country’s transmission asset was turned over to NGCP in 2009. The concessionaire is bound to operate and expand the electric transmission highway for 25 years, with the option to renew the concession deal for another 25 years on mutual consent of the relevant parties.   source