Japanese locators rue power supply question

By PAOLO JOSEPH L. LISING, Reporter, with IRIS CECILIA C. GONZALES, Senior Reporter and KRISTINE L. ALAVE, Reporter/BusinessWorld At least 40 Japanese firms in the Cavite Economic Zone (CEZ) which threatened in a letter last October 12 to the Philippine Economic Zone Authority (PEZA) to pull out of the country due to unreliable electricity supply, as especially illustrated by a nine-day power outage in the wake of Typhoon Milenyo towards the end of September, are cautious towards assurances state representatives made during a meeting last October 27. The head of the Cavite Export Zone Investors Association, San Technology, Inc. president Nobuo Fujii, told BusinessWorld in an interview last Friday that "there was still no firm plan presented by the two agencies on the rehabilitation project [of the ecozone’s power transmission lines that was part of a year-old agreement]" during the late October meeting with authorities of PEZA and the National Transmission Corporation (Transco). "What was presented was temporary repair [plans], but we still want a permanent solution to the problem," Mr. Fujii said. Hence, he said, "the threat of moving out of the ecozone still holds. If a power failure happens again, then we would consider moving out." In its October 12 letter to PEZA director general Lilia B. De Lima, the group said: "...power supply to this zone stopped on September 28 and [was] finally restored on October 7. It took nine days and a few hours [to restore power]..." "We...encountered many complaints from our customers...and headquarters in Japan. Honestly to say [sic], some were serious that we almost lost our confidence to keep operating business in here," the October 12 letter had said. "If similar things happen, we have to consider transferring our facilities to other countries." To be sure, Transco will start by the end of the month temporary repairs on the 115-kilovolt Dasmariñas-Rosario transmission line that serves the Cavite ecozone. Mr. Fujii said that his group was advised during the October 27 meeting that there will be about 12 hours of power outage at the ecozone, spread out in six non-working days between November 30 and January 15 while repair is ongoing. The repairs will take place on holidays so that business activities in the ecozone will not be affected. Among others, Milenyo had destroyed at least 42 poles linking power lines to the zone. Transco and the PEZA signed a memorandum of agreement on July 8 last year to rehabilitate the Dasmariñas-Rosario transmission line. Under the agreement, TransCo was to replace the existing wooden power poles with steel ones, with the PEZA to provide funding. But when asked about the commitment of either PEZA or TransCo to finally proceed with the line’s rehabilitation, Mr. Fujii replied that "there was no commitment at all on the timing of the project." Aside from the rehabilitation project, the Japanese locators also want "another source of power such as new generation facility inside or near the site," Mr. Fujii said, although he noted this option was not discussed either in the October 27 meeting. But PEZA deputy director-general for administration Justo Porfirio Yusingco said the agency is open to building a power plant in CEZ, the government’s largest export processing zone. The ecozone’s 250 locators use about 70 megawatts a day. "There is always that option," Mr. Yusingco said in a separate interview. "We are studying certain proposals to see what improvements to be made, thresh out the procedures." He admitted that PEZA has yet to discuss this option with locators inside the ecozone. PEZA’s main concern, he said, was the huge investment involved in building the separate plant and its impact on electricity pricing inside the zone. He noted that it could prove cheaper to just source electricity from generators. In the meantime, Mr. Yusingco said the CEZ and TransCo have agreed to improve the transmission lines to the zone to prevent another massive outage, starting with replacement of 30 wooden electric poles with steel ones. "What was discussed [in the October 27 meeting] was a program of activities that would lead to the restoration of lines to Rosario from Dasmariñas, Cavite," Mr. Yusingco said. Mr. Yusingco recalled that representatives of the firms agreed to the blackouts — which he said will have "negligible impact" — because they see the need to upgrade the reliability of the transmission network. "It’s their only access to the grid," he noted. TransCo president Arthur N. Aguilar said he assured the Japanese investors during the October 27 meeting that his agency would step up efforts to improve its system. "They asked us how we could speed up restoration work. They asked why it took us nine days [to restore power in Milenyo’s wake]. I told them we will work on it," he said. Among others, he said TransCo wants to add another helicopter to the two the agency now uses for round-the-clock maintenance and surveillance work on its towers, which are located in areas that are not easily accessible such as mountain ranges. Mr. Aguilar said TransCo is bidding out this month a contract for the restoration work on all of TransCo’s damaged poles. The contract will cover supply of materials and construction of new poles. He said TransCo needs to restore a total of 42 wooden and steel power poles that had been damaged by Milenyo. "We will start restoration work and have this finished, hopefully, before the next typhoon season next year," Mr. Aguilar said. The agency has been using temporary power facilities or the so-called emergency restoration structure (ERS) modules, in place of the 42 damaged poles. ERS are lightweight mini-towers used as temporary replacements while the big steel towers are being rebuilt. An ERS is usually built within two to three days, compared to a normal steel tower which could take six months.