Meralco capex to see 44% hike in 2014

Business Mirror

08 Dec 2013 

 

Written by Bianca Cuaresma

THE Manila Electric Co. (Meralco) hiked its capital expenditure (capex) for distribution for 2014 by about 44 percent from this year’s level, in anticipation of the new wave of businesses coming to the Philippines during the period.

Meralco President Oscar S. Reyes said in a news briefing in Hong Kong that the largest power-distribution company in the Philippines will be investing about P15.6 billion in capital for the further enhancement of distribution, especially with the upcoming boom in the country’s Entertainment City and the expansion of industries, specifically business-process outsourcing (BPO), in the country.

The projected capex of Meralco is higher compared to the P10.8-billion capex this year. It is also P2.1 billion higher compared to the earlier capex projection for 2014 announced at P13.5 billion last month.

“As I have mentioned, we continue to heavily invest in distribution capital expenditures. Over the last four years, from 2010 to 2014, I think we are talking about P10 billion a year. Next year this will spike to about P15.6 billion. So these are investments to continue reliable, adequate and cost-competitive power for our residential, commercial and industrial customers,” Reyes said.

Asked about the drivers that led to the higher allotment for capex, Reyes said this is in consideration of the “significant development” of businesses in the country.

In particular, the Meralco president cited the new projects in the Philippine Amusement and Gaming Corp. Entertainment City. He said there are about three other resorts and casinos coming in 2014 to 2015.

He also said there are industrial plants that have run out of space in their current locations and are planning to expand in new industrial zones next year, so Meralco also has to invest in enhancing the power-distribution performance in those new zones.

Reyes said he sees the BPO industry to be strong and are, likewise, expanding to new zones in the country. He disclosed that they are being approached by BPO executives, asking to ensure the power quality in the Philippines.

“Some of their options are China and the like. [They said] they like to do it in the Philippines but the power is critical. They want to be assured of adequate power with the excellent quality—no voltage fluctuations. If power will be assured then the Philippines will be their choice. So we are investing on that,” Reyes said.  source