National Grid Corp. of the Philippines will start operating the country’s transmission highway starting today after signing the final transaction agreements with Power Sector Assets and Liabilities Management Corp.
National Grid, which won the auction for the 25-year concession to operate the transmission facility National Transmission Corp., paid PSALM the down payment of $987.5 million, equivalent to 25 percent of its bid worth $3.95 billion. National Grid will pay the 75 percent balance in semi-annual payments over a period of 20 years.
National Grid and PSALM signed the deed of transfer and interim assignment agreements that paved the way for the turnover of the operations of the TransCo facilities today.
“We are committed to show higher performance from this day on, that we truly merit the franchise… because we will dedicate ourselves to become not only the largest but the best performing example of a privatized company…,” said National Grid president and chief executive Walter Brown during the signing ceremonies.
National Grid is a consortium made up of Monte Oro Grid Resources Corp. and Calaca High Power Corp. with a 60-percent stake and State Grid Corp. of Hong Kong Ltd. holding 40 percent.
State Grid is a subsidiary of State Grid Corp. of China, one of the world’s largest power utility companies in power transmission, distribution and sale. The mother company, which is expected to provide the technical and financial support in National Grid, serves 88 percent of China’s territories covering more than one billion customers.
“We will have the benefit of the tremendous experience of our partners. At the same time, the company will be managed as a Filipino company, and we will be able to use the technical expertise of our people but we will be able to supplement our technical expertise with theirs [State Grid],” Brown said in an earlier statement.
Brown accepted National Grid’s role as the new operator of TransCo’s nationwide system and facilities, reiterating the company’s promise to introduce efficiency into the grid’s operations, and ensure adequate and reliable power supply.
The winning consortium is required to implement various improvement projects to further benefit power consumers.
“The government is now a step closer to subjecting and providing the Filipino consumer reliable, quality and affordable supply of electricity. The successful privatization of the TransCo concession did not happen overnight. Considered as the single most important and biggest transaction in the government’s power reform program—the Transco privatization process required utmost prudence in implementing strategic decisions,” PSALM president Jose Ibazeta said.–Alena Mae S. Flores, Manila Standard Today