RP power industry left behind Asia neighbors

RP power industry left behind Asia neighbors

MANILA (AFP): Despite an increase of independent power
producers in the Philippines, competition in the country's power
industry is not developing as fast as those of its Asian
neighbors, an economist said yesterday.

"The industry needs to be flexible before they can attract the
capital and technology required to quickly expand their energy
infrastructure," said Hui Ping Liew of the Institute of Sectoral
Economics of the Center for Research and Communications.

Addressing energy executives attending an international
conference on power production here, Hui said Singapore, Malaysia
and Thailand are in varying stages of privatization and capital
generation for energy projects, while the Philippines is still in
the planning stage.

Power generation is still largely under the control of the
state-run National Power Corp. (NPC), which has yet to implement
definitive plans to break its assets into different corporations
in its planned privatization bid.

"To free up the generation so that it becomes a competitive
environment is the point where (independent power producers)
become more interested," Hui said.

The Philippines hopes to generate 20,000 megawatts of power in
the next 10-to-15 years, she said, opening further the prospects
for independent power producers.

The growth in power demand is placed at 10.6 percent per year
until 1998, translating to an average of 735 megawatts over the
next six years, which is expected to jump to 1,700 MW a year
after 1998, she added.

NPC reports show over 30 power projects constructed with the
help of foreign and local power producers have been completed or
are under completion, while an additional 14 projects have been
scheduled for bidding.

The power projects to be bid, among them a 1,200-MW plant
using natural gas, are slated for commercial operation between
1996 and 2005.

While implementing rules and regulations for independent power
producers were clear, large portions of the generation,
transmission and distribution remained a "natural monopoly" by
the government, Hui said.

At the same conference, Albert Dalusung, executive director of
the private Energy Development and Utilization Foundation Inc.,
said the proliferation of build-operate-transfer (BOT) projects
"perpetuate NPC dominance over power generation."

"There must be flexibility in how the mix is to be set,
otherwise it will contradict the basic concepts of sector
deregulation and privatization," he said.

He said BOT projects accounted for more than 3,000 MW of power
projects, compared with 1,100 MW approved under the
build-operate-own scheme, which were more consistent with power
sector privatization.

Hui cited Malaysia's state-run Tenaga Nasional Bhd. which is
publicly listed. Malaysia expects IPPs to provide more than 40
percent of its power generation needs, she added.

Singapore intends to privatize its gas and electricity groups
this year and offer them to the public by 1996, while Thailand
has successfully floated 48 percent of the state's Electricity
Generating Co. last November 1994, she said.