By
Elijah Felice Rosales - July 4, 2019
THE Philippine
Competition Commission (PCC) has approved the joint venture of the Bases
Conversion and Development Authority (BCDA) and the consortium of Manila
Electric Co. (Meralco) and its Japanese partners for the development of a power
distribution system in New Clark City. In a commission decision last week, the
PCC authorized the BCDA and the Meralco-Marubeni Consortium to carry out its
project. It said the transaction will not result in a substantial lessening of
competition in the retail electricity supply market within New Clark City and
the distribution utility market of generated power through a supply deal in the
Luzon and Visayas grids.
The PCC argued New
Clark City will give rise to establishments or units that are qualified to
choose their own retail electricity supplier, not necessarily the joint-venture
firm. Given the development of New Clark City, the PCC sees an influx of
locators, particularly agro-industrial and institutional clients, to qualify as
contestable customers whose average monthly consumption reach at least 750
kilowatts.
As such, they can be
deemed by the Department of Energy (DOE) as qualified to participate in its
electricity open access scheme, under which they will be given the right to
choose their own retail electricity supplier.
These power providers
can come from anywhere in the country and can compete for qualified New Clark
City locators in need of the supply. They should also be provided with a level
playing field under the DOE’s competitive selection process (CSP).
The competition body is
of the view the CSP will ensure retail electricity in New Clark City is
competitive and that it will prevent the joint venture firm from dominating the
market.
The Meralco-Marubeni
Consortium is composed of Meralco, Japanese conglomerate Marubeni Corp. and
power distributors Kansai Electric Power Co. and Chubu Electric Power Co.
Marubeni; its consolidated subsidiaries are engaged in the handling of products
and provision of services in the areas of import and export.
New Clark City, a
9,450-hectare area located 100 kilometers north of Metro Manila, is slated to
become the first smart, green and sustainable metropolis in the Philippines.
The National Government
Administrative Center will be situated there. The NGAC will house the backup
offices of several government agencies to ensure their operations are
uninterrupted in times of man-made and natural calamities.
The NGAC will also
feature the sports facilities to be used for the country’s hosting of the 2019
Southeast Asian Games in November.
The construction of New
Clark City is in line with the Duterte administration’s economic policy of
spreading growth to the regions. By building infrastructure outside of Metro
Manila, the government seeks to attract investments and create jobs in rural
areas, which, in theory, should decongest the capital.
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