The Philippines government is considering the option selling at least 51 per cent of the National Transmission Co to private buyers as an alternative to a 25 year concession. However a foreign company would only be permitted to own 40 per cent of the company so it would have to form a partnership with a local company in order to achieve a majority holding.
If a sale were to take place, the Power Sector Assets and Liabilities Management Corp would take control of the remaining 49 per cent stake. Under the alternative, 25 year lease scheme which would be renewable for a further 25 years, the concessionaire would be mandated to expand and improve the transmission system and would be responsible for arranging the financing necessary for the required projects. It seems likely that similar conditions would attach to a sale.
The National Transmission Co is due to be privatised in the second quarter of this year according to the government. Privatisation roadshows in the USA are scheduled to start in the USA in February. However before this takes place, the privatisation advisors – Credit Suisse First Boston and N M Rothschild and Sons – have proposed that several steps should be completed, including: •The approval by the Energy Regulatory Commission of an unbundled transmission tariff and a policy statement regarding transmission tariff regulation •The promulgation of the implementing rules and regulations and other issuances, including the Grid Code and the transmission company’s right to recover the cost of investments required by the Transmission Development Plan •The approval of the rules for the Wholesale Electricity Spot Market, including the treatment of ancillary services.
The decisions of the Energy Regulatory Commission are expected to affect the floor price for the transmission company that would be offered by the government to potential investors.
