NGCP takes over operation of TransCo
January 14, 2009
The Power Sector Assets and Liabilities Management Corporation (PSALM) formally turned over today (14 January) the 25-year concession of the National Transmission Corporation (TransCo) to the National Grid Corporation of the Philippines (NGCP) in simple ceremonies held at the PSALM Makati office.
With the signing of the deed of transfer and the turnover of the ceremonial key, the NGCP officially has the authority to operate the country’s sole transmission system starting 12:00 a.m. of 15 January 2009. The ceremonial key was received by NGCP President and Chief Executive Officer Walter W. Brown, NGCP Chairman of the Board Du Zhigang, and NGCP Director Elmer G. Pedregosa from Energy Secretary Angelo T. Reyes, Finance Secretary Margarito B. Teves, TransCo President Arthur N. Aguilar, and PSALM President Jose C. Ibazeta.
Last week, the NGCP remitted USD987.5 million to PSALM as its upfront payment for the operation of the transmission system and in compliance with the provisions of the sale transaction. The amount comprises 25% of the USD3.95-billion purchase price to acquire the concession contract. The offer was made in a public bidding that PSALM conducted in December 2007. The ceremonial check was received by the government representatives during the program.
“This morning’s event highlights the unwavering support and confidence of the investor community in the government’s capability to institute the necessary reforms in the Philippine power industry,” said Mr. Ibazeta in his welcome remarks. “The government is now a step closer to its objective of providing the Filipino consumer reliable, quality and affordable supply of electricity.”
Mr. Aguilar, for his part, said that the government now entrusts the country’s transmission system and the people of TransCo to the good hands of the NGCP. He noted that under the new management, TransCo is expected to comply with the Energy Department’s policies and programs throughout the 25-year concession contract.
With the NGCP as a partner, the government looks forward to achieving greater heights in the power industry, Secretary Reyes said, pointing out the capability of the private firm to establish state of the art technology in the transmission field and provide better service to the Filipino people.
Mr. Brown noted that the NGCP obtained the congressional franchise based on merit and on its compliance with the transaction agreements and guidelines. It assured the government of NGCP’s dedication to perform efficiently as it provides quality service to Filipino consumers through a safe, stable, and reliable supply of electricity.
Relying on the extensive experience and successful performance of the State Grid of China (the foreign consortium member of the NGCP) in operating a transmission system that is thrice bigger than the country’s transmission complex, NGCP Board Chairman Zheng Baosen assured the Philippine government that the NGCP would fulfill its obligations while contributing significantly to the development of the Philippine economy.
In his closing remarks, Secretary Teves said the government would support the NGCP to effect a smooth transition. With the completion of the TransCo privatization, the government could focus more on the challenge of energizing the country, he added.
