(The Philippine Star)
- September 3, 2018 - 12:00am
MANILA, Philippines — Financially troubled Zamboanga City
Electric Cooperative Inc. (Zamcelco) has finally awarded the investor –
management contract of the Zamboanga City Electric Distribution’s 25-year
management to the joint venture of Crowninvestments Holdings Inc. and Desco Inc.
The joint venture will pump P2.5 billion into the
debt-ridden electric cooperative, after Zamcelco held its fourth bidding of the
contract.
The first and second bids were declared failures because no
party showed interest in the floor price of P800 million. The third bidder
withdrew last December, leaving Meralco-Comstech to enter into a negotiated
agreement with Zamcelco.
At a negotiated amount of P550 million to be pumped into
Zamcelco, the Meralco-Comstech joint venture also withdrew from the concession.
The joint venture said this is the appropriate amount to pay
all existing obligations, provide capital infusion to upgrade the facilities
and improve the services of Zamcelco.
While there were delays, the process has been completed as
the board stepped in to ensure that the agreement will be free from any
influence.
The joint venture’s commitment to the bid is proved by a
contract, duly approved by the National Electrification Administration
(NEA).
The returns on the contract is based on performance based
targets. It will be to the joint venture’s loss if it fails to meet the
targets, according to NEA systems loss and collection efficiency ratings.
Four other bidders submitted their qualification documents,
Davao Light and Industry, Nikolas Management Services, Filinvest Development
Utilities and Comstech Services. But they did not submit any financial bid,
reportedly backing off from the bid by the joint venture of Crowninvestments
and Desco.
Zamcelco has been saddled with over P1.5 billion of
debt and payables to its power suppliers, PSALM, San Miguel, Alsons and
others.
Systems losses have also stood at 23 percent, which has
caused more than P50 million a month in cash flow negativity for the ailing
cooperative.
The P2.5 billion, which is 500 times more than the previous
bid of P550 million, would solve the power problems of Zamboang City, pay off
Zamcelco’s debts and spur businesses in the penninsula.
Reports said the joint venture is prepared to deposit the
amount and proceed to manage the cooperative.
The residents of the city are reportedly looking forward to
being free from rotational brownouts of up to four hours in the last several
years.
They said Zamboanga deserves this infusion to be the primary
distribution utility in Mindanao.
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