Three groups bidding for Napocor's Masbate assets

Three local groups were bidding for the Masbate-based small power utilities group (SPUG) assets of the National Power Corp. (Napocor), an industry source said Wednesday. The source said DMCI Holdings of the Consunji Group; Vivant Corp., which is run by the Aboitizes and Garcias; and Masbate Progress Power Corp., a consortium led by EEI Corp. joined the auction on Monday. However, the recent bidding process, the source said, involved the opening of the technical bid, apart from the financial bid. The financial bid, according to the source, would be opened and evaluated by the Power Sector Assets and Liabilities Management Corp. (PSALM) and the International Finance Corp. (IFC) on Nov. 15. PSALM is a government agency that is handling the privatization of Napocor assets. IFC, an investment arm of the World Bank, is the financial advisor for SPUG privatization. "We are currently evaluating the technical bids. We will open the financial bids next week," the source said. The privatization of SPUG Areas was mandated by DOE Circular No. 2004--01-001 issued on January 26, 2004. It calls for the periodic assessment of the requirements and prospects of bringing power generation and associated power delivery systems to commercial viability on an area-by-area basis, including a program to encourage private sector participation in the SPUG areas. Last year, Napocor listed the first wave areas comprising of 14 islands nationwide to be privatized.­ Three of these islands: Marinduque, Tablas and Romblon, have gone already gone through a successful bidding process. The program is part of a determined effort of the DOE and Napocor to turnover to the private sector the generation of power in these islands, which hopefully will result in some annual operating cost savings of P1.5 billion, which can instead be used for the electrification of 7,500 more barangays over a five-year period. Part of the program’s objective is for the government to continue bringing electricity and progress to more remote areas without increasing the burden on the missionary electrification charge on electric consumers nationwide. Under the program, government subsidies on electricity rates to these off-grid areas will be cut from P458 million to P168 million. The program would also enable Napocor-SPUG subsidies to be reduced by 50 percent. - GMANews.TV