Meralco spending P12 B this year to strengthen network

Danessa Rivera (The Philippine Star) - August 5, 2019 - 12:00am

https://www.philstar.com/business/2019/08/05/1940570/meralco-spending-p12-b-year-strengthen-network

MANILA, Philippines — Manila Electric Co. (Meralco) is spending over P12 billion this year to strengthen its network and to relocate distribution poles affected by infrastructure projects of government.

Of the P12.03 billion networks capital expenditure (capex) set this year, the power distributor has already utilized 67 percent or P8 billion as of end-June, Meralco senior vice president and head of networks Ronnie Aperocho said.

He said P2.16 billion was spent for projects that address load growth requirements of the Meralco franchise.

A significant portion of the workload includes support for government’s Public-Private Partnership (PPP) and Build Build Build (BBB) programs.

“We also spent significant amount for the relocation of poles to support PPP/BBB programs projects of government. As of June 30, we have already relocated close to 2,800 poles  out of more than 4,000 poles,” Aperocho said.

To support government priority projects, at least 4,260 poles need to be relocated. Of the running total, 2,780 affected poles have already been relocated as of end-June.

The PPP, BBB and other government projects include the C-5 South Link, the Cavite-Laguna Expressway  Light Rail Transit Line 2 (LRT-2) East Extension Project, C3-R10 Road, Skyway Stage 3, Metro Rail Transit Line 7, LRT 1 Extension project, the Lawton Avenue widening, and the Philippine National Railways (North 1 Project).

Meanwhile, Meralco is preparing for six more major government projects that are prepared to commence this year, Aperocho said.

These include the Bonifacio Global City Ortigas Link, C-6 Southeast Metro Manila Expressway, PNR North 2, Metro Manila Subway Project, the North Luzon Expressway-South Luzon Expressway Connector Road and Common Station.

Company officials said a big chunk of the networks capex are relocation and upgrades, which are non-revenue generating.

“For the demand growth, very little comes from the BBB projects. In fact, the question you may want to ask, is of the capex that we spent of P8 billion, how much are revenue producing and how much are these BBB built for the country, which are not directly revenue producing. But, of course, we have to do it,” Meralco chairman Manuel V. Pangilinan said.

Broken down, almost half of the P12.03 billion networks capex set this year, or P5.14 billion, is allocated to new customer connections.

Meralco has also budgeted P3.51 billion for asset renewals, such as replacement of poles, meters, substation equipment and relocation of poles affected by projects of the Department of Public Works and Highways.

The company has also set P250 million to relocate distribution facilities affected by the PPP and BBB programs, P858 million for movable non-network assets such as information technology and software, tools, work and testing equipment, and P46 million for immovable non-network assets like construction of meter warehouse.

Meanwhile, P2.22 billion was allocated to address load growth for the year, which include the construction of new switchyards and feeders for the Filinvest substation, the TMC substation and Bridgetowne substation.