Published
By Myrna M. Velasco
State-run Power Sector
Assets and Liabilities Management Corporation (PSALM) has indicated that it is
no longer lining up the privatization of the Agus and Pulangui hydropower
assets, unless the Department of Finance (DOF) would give go-signal to it.
PSALM President and CEO
Irene Joy B. Garcia disclosed that “at the moment, there is no instruction to
privatize Agus and Pulangui,” referring to the biggest hydro assets of the
country in the Mindanao grid.
“While it is an asset
in the list of PSALM, it’s not something that we will be privatizing anytime
soon, unless we get any instruction to do so,” the PSALM chief executive
stressed.
Finance Secretary and
PSALM Board Chairman Carlos G. Dominguez III made previous pronouncements that
he would want the plants to undergo rehabilitation first before the State
decides on their privatization fate.
As noted by Garcia, “on
the rehabilitation of Agus, the DOF is really in the driver’s seat with respect
to that activity,” adding that they are also coordinating with the World Bank
Group when it comes to funding the feasibility study on the rehab plan for the
assets.
“We are at that stage
of coming up with a feasibility study that would really assess how to
rehabilitate – and what is the cost of the rehabilitation. Once that is
approved, the rehab will be turned over to Napocor (National Power Corporation)
for implementation,” Garcia said.
Past divestment plans
on the hydro facilities had always been politically charged and tension-laden
as many stakeholders in Mindanao are opposed to relinquishing the assets into
the hands of the private sector.
There have been
proposals to just undertake ‘corporatization’ of the Agus-Pulangui plants and
place them under a company that shall be managed by Mindanao stakeholders; but
that had not passed legislative maze when it was lodged in Congress.
With Mindanao’s power
supply on surplus mode at this point, relevant industry players deemed it “a
perfect timing” now to pursue the assets’ rehabilitation so their electricity
generation can be optimized.
These two major hydro
plants have aggregate installed capacity of 982 megawatts, but they have been
de-rated over the years as they were ran to the ground when they had to serve
bulk of the power needs of Mindanao.
As initially crunched,
the cost of rehabilitation may run up to P54 billion – and four multilateral
lending firms have already expressed interest to extend financing, including
that of the International Finance Corporation of the World Bank Group; Asian
Development Bank as well as Japanese and Chinese funding entities.
The Agus-Pulangui
hydropower complex remains as ‘prized assets’ of the government – that even at
de-rated capacities, they still yield P8.0 billion to P10 billion in operating
income for PSALM annually.
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