Mindanao power plant rehab to cost P54B

By: Ben O. de Vera - October 14, 2017
http://business.inquirer.net/238586/mindanao-power-plant-rehab-cost-p54b

The rehabilitation of the state-owned National Power Corp.’s (Napocor) Agus-Pulangi hydroelectric power plants in Mindanao will cost P54 billion, funding for which the government plans to source from China, the Department of Finance said yesterday.

Since rehabilitating the facility will not only increase its capacity but also add 30 years to its service life, Napocor president Pio Benavidez was quoted by the DOF as saying that the government needed to take advantage of the fact that there would be an expected power oversupply in Mindanao in the next three years.

As such, Finance Secretary Carlos G. Dominguez III told Benavides: “Let us do it now [because] we are not under pressure.”

Under the Napocor’s plan, the government will first rehabilitate the oldest, 40-year-old Agus 6, to be followed by the 37-year-old Agus 2 and 34-year-old Agus 7. Agus 4 and 5 as well as Pulangi 4 are 31 years old, while Agus 1 is operating for 25 years now.

“The rehabilitation of units 3-5 of Agus 6 costs around $172.5 million; Agus 2, $207 million; Agus 7, $62.1 million; Agus 4 and 5, $245.07 million; Pulangi 4, $293.25 million, and Agus 1, $92 million,” or a total of $1.07 billion, the DOF said.

At present, the plants operate at about 60 percent of their more than 900-megawatt rated capacity, Benavides said.

“The P54 billion would finance the replacement of old transformers as well as old electrical equipment to make these facilities more reliable. The rehabilitation could take from four to five years and would increase the total capacity by an average of 10 percent for each facility. After the rehabilitation, total capacity will reach more than 1,000 megawatts,” according to Benavides.

For Benavides, the rehabilitation should be done in phases because the facilities could not be shut down simultaneously.

Dominguez told reporters last week that the rehabilitation of the Agus River hydroelectric power system would be included in the second basket of six to eight projects to be pitched for Chinese financing.

“I told the Chinese [that Agus rehabilitation] is very important for us because no matter how much infrastructure you have, if you don’t have power it doesn’t work right,” Dominguez said.

The Philippine and Chinese governments earlier identified the first batch of projects to be funded by China, which included the P4.6-billion Binondo-Intramuros and P1.4-billion Estrella-Pantaleon bridges in Manila, which will be financed by grants; the P10.9-billion New Centennial Water Source-Kaliwa Dam project, and the P2.7-billion Chico River Pump Irrigation project in Cagayan and Kalinga provinces. Also part of the initial batch of projects were the elevated expressway in Davao City, the construction of an industrial park and two drug rehabilitation facilities.

The Chinese government will also finance four more Philippine projects, namely the reconstruction of Marawi under a 20-million-renminbi or $3-million donation in kind; Panay-Guimaras-Negros Island bridges; the provisions under the enforcement and security cooperation agreement between Manila and Beijing, and construction of an agriculture technical center.