THE government has once again declared the bidding for the 25-year concession of the National Transmission Corp. (Transco) a failure after only one of three prequalified bidders submitted a bid.

At 11:43 a.m., the consortium of Citadel Holdings Inc. and Italian power lines company Terna SPA, which was represented by former Bases Conversion Development Authority (BCDA) president Rogelio Singson, submitted its bid to the Power Sector Assets and Liabilities Management Corp. (Psalm) in a public bidding at the Bulwagan ng Diwang Pilipino hall of the Development Bank of the Philippines office in Makati City.

Although the consortium of Triratna, Newbridge Asia IV L.P. and Malaysian power firm Tenaga Nasional Berhad and the consortium of Monte Oro Grid Resources Corp. and State Grid Corp. of China, were present at the public bidding, they did not submit their bids to Psalm.

The government move to declare the bidding a failure drew instant protests from Citadel, with its senior vice president, Singson, saying it was not their fault the others were not ready; and this—constant bidding (this is the third)—“cannot go on forever.”

The government has tried since 2003 to sell the 25-year contract to operate the grid as part of a major plan to privatize the power industry. Several generating plants and other state assets are also planned for sale in order to pay down debt and slash the huge interest payments on them.

Notwithstanding the officials’ initial statement that a new bidding is preferred over negotiation, members of the Joint Congressional Power Commission expressed misgivings that a “failed bidding scenario” was being worked out to justify a succeeding negotiated deal with a favored bidder for the lucrative Transco concession.

Sen. Serge Osmeña warned that the ground had been set for a failed bidding of the Transco concession to pave the way for “negotiated” arrangement with certain parties said to have close links to the Arroyo administration.

After Monday’s failed bidding, the Psalm management briefed the board on the various issues raised by the bidders.

In an interview, Ramon S. Ang, a partner in the consortium of Triratna and San Miguel Corp. vice chairman, said they decided not to bid since they had to clarify certain provisions in the transaction documents, particularly on the joint and several liabilities issues.

“We are here to show our bid bond, and we are going to try again but the issue has to be resolved first,” said Ang.

Triratna’s statement, furnished to reporters, said the consortium led by Triratna Holdings has conveyed to Psalm an offer to purchase the transmission assets of the National Power Corp. of the Philippines subject to the resolution of certain provisions in the transaction documents.

In another interview, Singson, now senior vice president of Citadel, told reporters they were ready to negotiate for the 25-year concession of Transco with the government after having completed all the documents.

“We submitted all of the transaction documents signed and executed by us,” he added.

He said the government procurement law states that after one failed bidding, the government can opt for a negotiated bid. Thus, Citadel group will pursue that possibility rigorously.

“We are ready to negotiate with the government as soon as possible; we are ready to meet because the Italian principals are here with us and we hope when we meet with them downstairs we’ll convey this clearly to them and we expect the government to negotiate with our consortium, having completed every requirement they have asked so far,” Singson said.

Citadel, he said, joined the bidding for Transco’s concession since it was first scheduled to be bid out since 2003, and “this cannot go on forever.”

And should the government decide to rebid the asset for the fourth time, according to Singson, Citadel will probably just walk away from it (rebidding).

In between the announcement and press conference, Psalm officials met with representatives from Citadel group also within the DBP building.

After the meeting, Singson told reporters they have appealed to Psalm so that the government would negotiate with whoever came on the table.

“I have been in the government and I would have done it that way [negotiated bidding]. This is already the third time that Psalm has declared the bidding for Transco a failure, so what else are they waiting for. If they really want to privatize this, now is the best time,” he said.

“We will appeal to them, as we have spent a lot of money, put in a lot of efforts, and the Italian principals are here. In fairness to the private parties, it’s not our fault if the others are not yet ready,” said Singson.

He said the Transco bidding should have been held last November.

In a press conference two-hours after the bidding was declared a failure, Psalm board chairman and Finance Secretary Margarito B. Teves said the Psalm board will evaluate the issues raised by the bidders before it announces the next steps to be taken.

Teves admitted disappointment in the outcome of the bidding, but quickly said the failed bidding of Transco will not greatly set back the government’s efforts to privatize all of its assets.

The Psalm board will take into account the concerns and suggestions of the three bidding groups, Teves said. “We will make an announcement within a week on what Psalm will do next with respect to the bidding of Transco’s 25-year concession,” he added.

“President Arroyo has even been informed and she advised that we should [take] the reasonable approach after reflection by the [Psalm] board,” Teves said.

Separately, Senator Osmeña expressed misgivings.

“If there is a failed bidding, it will be China State [that will likely get it] …and I know who the backers are,” he said, later naming Mr. Boboy Macapagal, brother of President Arroyo, among them.

At last week’s JCPC hearing Sen. Joker Arroyo also voiced concern that the Transco deal was being finalized just as the oversight panel was set to take a break when Congress adjourns to give way to the May 14 mid-term elections. 

Energy Secretary Rafael Lotilla then assured the JCPC that the government is ready to face a failed bidding “but the bias is there for transparent biddings.”

Meanwhile, President Arroyo said on Monday that the government would have to be “more professional” in the conduct of bidding for the Transco concession to generate more interest, following the fourth failed bidding attempt.

Albay Rep. Jose Salceda, the President’s economic adviser, said that the failed bidding is “a big-ticket victim of abnormal relations between the Senate and the President.” He did not elaborate.  -- With B. Fernandez, M. Gonzalez

THE government has once again declared the bidding for the 25-year concession of the National Transmission Corp. (Transco) a failure after only one of three prequalified bidders submitted a bid.

THE Senate ratified Monday night a bicameral conference committee report on a proposed remedial legislation granting a one-time amnesty on certain tax and duty liabilities incurred by investor-locators in special economic zones subsequently created outside the Subic freeport.

THERE are potential risks of a financial crisis arising from the inadequacy of regulatory oversight over the activities of financial conglomerates (FCs), mostly universal banks, operating in the country, a financial market policy group said Monday.

THERE are no difficult barriers for government to target and actually achieve higher levels of growth with positive factors propping the local economy, a noted economist said on Monday.

AS the threat of a bird flu hovers above the region, the Department of Budget and Management said Monday that a P122.8-million “bird flu” fund in the soon-to-be-signed national  budget for 2007 will be made  available to the Department  of Agriculture for surveillance and quarantine

ONLY around half the country’s savings actually get invested in productive undertakings but even then, the little set aside by Filipino savers helps expand the economy by more than 5 percent every year, the Department of Finance reported on Monday.

FIRST Pacific Co. Ltd. of Hong Kong did not yield its right to match the P25.2-billion bid of a Singaporean company for the government’s slightly over 46 percent stake in Philippine Telecommunications Investment Corp. (PTIC).