The Philippines National Power Corp has valued the 40 per cent stake in the National Transmission Co (Transco) which is to be offered to a strategic investor through an auction process during the first quarter of 2002 at between $2.3 billion and $2.7 billion. Financial advisors N M Rothschild & Sons and Credit Suisse First Boston have been given until 29 October to finalise the privatisation plan.
Assets for sale include the transmission grid on Luzon at 230kV and above, the Visayas grid at 69 kV as well as a number of isolated distribution systems and the Mindanao grid.
There is still uncertainty, however, over the precise nature of the sale. Government planners have not decided whether to offer a 25 year concession or make an outright sale of the share in the company.
Meanwhile, the state-owned power company is already believed to have shortlisted a number of power companies as bidders for Transco. Front runners are considered to be the UK’s National Grid and France’s Electricite‚ de France. Several Japanese companies are also on the list. These include Kyushu Electric and the Japanese Development Corp (JDC) though the inclusion of these two may be suspect.
Some companies may not be permitted to join the bidding because of the Power Reform Law which limits ownership of power sector assets in the Philippines. The law forbids one company owning both generation and transmission assets. Kyushu already has a stake in a 1200 MW natural gas fired project which could preclude it. JDC has no financial conflict of interest but its competence to operate the transmission system has been questioned.
