Manila Bulletin: PSALM liabilities still ‘monstrous’ at P759B
by Myrna Velasco, September 28, 2014
Manila Bulletin
The veritable monster liabilities of Power Sector Assets and Liabilities Management Corporation (PSALM) remained at a staggering P759 billion.
PSALM president Emmanuel R. Ledesma Jr. has disclosed to Congress last week that as of June 2014, the level of power sector debts and contingent liabilities still hover at P609 billion for the principal portion and P150 billion in interest charges.
He reckoned that prior to privatization of the power sector in year 2000, the liabilities had been at P863 billion, while admitting that it had not really gone down that much from then due to array of factors.
In 2000, debts had been at P863 billion… as of June 2014, principal debts had been at P609 billion and interest charges at P150 billion,” Ledesma has noted.
The PSALM chief executive has echoed previous justifications given by his predecessors on the very slow or non-phase out of power sector liabilities despite the flow of hefty proceeds from the divestments of majority of the National Power Corporation’s (NPC) assets.
Ledesma cited the delay in privatization, which he noted had compelled PSALM then to resort to more borrowings to plug its cash requirements to settle maturing debts as well as on alignment of operating expenses of un-privatized generating assets.
Industry watchers, however, have been disputing some of PSALM’s claims – noting that part of the failure on liability management had been the faulty privatization package set for some assets and the ‘fire sale’ undertaken for other facilities.
While the Aquino administration is already on its countdown to leadership changeover, it remains a guessing-game in the power industry why the multi-billion US dollar proceeds had not been prudently applied to drastically pare PSALM’s outstanding financial obligations.
It can be gleaned from the figures that from pre-privatization to the present time, the level of PSALM liabilities’ reduction had just been at P104 billion.
If the P200 billion NPC debt absorption done by the national government in 2004 would be factored in, it can be clearly deduced that the proceeds from privatization had not helped a bit to trim down the power sector’s indebtedness.
With the company apparently hopeless in wiping out the liabilities placed under its charge, it can now only depend upon pass-on of universal charges to consumers to raise cash for its future debt settlements.
Based on documents released by PSALM last year, it pegged the total revenues from NPC assets’ privatization at $21.757 billion.
“The generated privatization proceeds of PSALM (were) $21.757 billion while the actual collection amounted to $6.371 billion,” a report detailing out accomplishments under the Electric Power Industry Reform Act (EPIRA) had laid down.
The breakdown of proceeds from either sale of assets or the transfer of power supply contracts to private sector takers had been as follows: $3.260 billion for generating assets; $0.004 billion for decommissioned plants; $7.685 billion from the concession deal for the National Transmission Corporation’s (TransCo) assets; and $10.807 billion for the appointment of independent power producer administrators.
