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THE
government has decided to reschedule another bid round
for the 25-year concession of the National Transmission
Corp. (Transco) amid the push of some industry
stakeholders for the Power Sector Assets and Liabilities
Management Corp. (Psalm) to negotiate with the lone
bidder group of Citadel Holdings Inc. Terna SPA.
Psalm—the agency tasked to divest the government’s power
generation and transmission assets—declared the last
bidding of Transco’s operation and management contract a
failure after only one of the three prequalified bidders
submitted a bid.
“To
ensure that the public has full confidence in the
integrity and transparency of the government’s process
with regard to the privatization of Transco, the Psalm
board has decided to conduct another bidding,” Psalm
said in a statement.
Energy
Secretary and Psalm board vice chairman Raphael P.M.
Lotilla thanked the consortium of Citadel and Terna for
its strong commitment to participate in the Transco
privatization and said he will encourage their
participation in the next bidding round.
Citadel-Terna
officials expressed shock at the decision to rebid.
Lotilla
said the Psalm board weighed the different issues
arising from a rebid and concluded that maintaining the
transparency of the process through an open and
competitive bidding will ensure the stability of the
Transco concession over its 25-year life.
Citadel
senior vice president Rogelio Singson said they will
discuss the latest development with their Italian
partners–Terna SPA. “We are just shocked at the
decision,” he added.
Singson
declined to comment further saying they will make a
statement in due time.
Psalm
said it considers the failed bidding last February 5 as
indicative of recurring issues that need to be urgently
and effectively addressed before undertaking another
bidding process.
Psalm
committed to develop a concrete plan of action and find
ways to enhance the value of the asset for the next
bidding.
“While
we conduct this comprehensive review of the Transco
bidding, we will intensify our efforts to accelerate the
privatization of our power generation assets such as
Masinloc which we are determined to sell by the third
quarter of this year,” Psalm said.
“The
government is fully committed to privatization in the
power sector with every step of the process conducted
fairly and transparently,” Psalm said.
The
Philippine Chamber of Commerce and Industry (PCCI)
earlier offered its support to Psalm to opt for the
negotiation of the purchase of Transco with the
qualified entity that submitted a bid last.
“This is
the fourth time that a similar international bidding was
held and it is about time that the national government
shows its determined will and formal decision to finally
proceed with the initial privatization of the Transco
under its own terms and conditions as defined in the
latest bidding,” PCCI said
PCCI
said, in formal business sense and practice, negotiation
is and would be totally acceptable and respectable
nationally and internationally.
Further
adjustments and negotiated terms with bidders who failed
and abstained from bidding would not only cause more
delays, but will also manifest a continuing weakness and
even credibility in national government decision-making
and transparency in its processes, matters that could
further discourage foreign legitimate and truly
private-sector investors from participating in other
international programs.
“We
support an immediate negotiation of the Transco purchase
with the current lone qualified bidder and let the
government’s stated terms and conditions in the bid
prevail,” PCCI concluded.
Earlier,
members of the Joint Congressional Power Commission
expressed fear the lucrative Transco concession auction
is being rushed while Congress is on recess to preclude
Powercom’s oversight scrutiny of the multibillion-peso
deal that would give the foreign bidders the right to
run the country’s main transmission grid for 25-years.
“What’s
the hurry to award the Transco concession?” asked Sen.
Mar Roxas, reminding power industry authorities involved
in the Transco sale to strictly adhere to a policy of
transparency to assure people that everything is above
board.
President Arroyo had said the government will hold
another bidding for the 25-year Transco concession
following the failure of last week’s bidding with only
one investor submitting the required bid documents to
the Power Sector Assets and Liabilities Management Corp.
(PSALM).
Sens.
Joker Arroyo and Sergio Osmeña III earlier voiced
misgivings that Congress, having adjourned sessions
until June to give way to the May 14 congressional and
local election campaign, would not be able to exercise
its oversight functions in making sure the deal does not
become disadvantageous to the government.
Osmeña
warned that the stage is being stage for another failed
bidding so the government could then enter into a
negotiated arrangement with a favored bidder being
backed by influential parties with known Palace
connections.
Senate
Minority Leader Aquilino Pimentel noted that despite
previous biddings conducted by Psalm for the Transco
concession, not one entity has qualified even if at
least three groups of investors expressed interest in
running the power grid.
“We need
to ensure that the government continues to conduct open,
public and sustained invitations to as many bidders in
order to get the best deal possible for the Transco
assets,” Pimentel added. (With B. Fernandez) |
