Philippines to get US$2b from Napocor sale: Report
Philippines to get US$2b from Napocor sale: Report
Dow Jones, Singapore
The Philippine government expects to generate US$2 billion from the sale of state-run National Power Corp., or Napocor, transmission operations, according to Tuesday's Business World.
Asisclo T. Gonzaga, president of National Transmission Corp., or Transco, said the figure was based on initial estimates and could be even greater, depending on how the sale is conducted.
Transco, which comprises Napocor's transmission operations, was formed as part of the government's privatization strategy.
Gonzaga said he expected the sale of Transco's subtransmission assets to distribution companies to generate an additional 12 billion pesos (US$1= 51.555 peso).
Napocor's subtransmission assets are the low-voltage transmission facilities linking the national power grid to the distribution operations.
Transco is currently in negotiations with distribution firms over the sale of subtransmission assets, according to Business World. The subtransmission asset sale will be conducted outside of the government's main privatization strategy. Transco must complete the transfer of the subtransmission assets in two years under the electric power laws.
As part of the government's privatization strategy, Transco will be sold ahead of Napocor's power generation operations, either through a concession agreement - which will have a contract period of 25 years - or by outright sale.
The Philippine government is expected to complete the draft of the rules and regulations for Napocor's privatization later this month and present it to President Gloria Macapagal Arroyo by the end of this year.
Once approved by the president, the government plans to complete the sale of Transco to a single global player by mid- 2002.
Edgardo del Fonso, president of the Power Sector Assets and Liabilities Management Corp., or Psalm, said Friday that around 10 European and Asian groups have expressed an interest in acquiring Transco. Psalm is the agency tasked to handle Napocor's privatization.
National Grid Group PLC (NGG), a U.K.-based power transmission company, Electricite de France (F.EDF), Kyushu Corp. and Energy Power Development Corp. of Japan have shown an interest in purchasing Transco.