State-run Power Sector Assets and Liabilities Management Corporation (PSALM) is planning to pursue 25-year concession arrangement under the privatization plan of the 932-megawatt Agus-Pulangui hydropower facilities in the Mindanao grid.
“We have a plan – the plan is for concession agreement,” PSALM President Edward Dennis A. Dela Serna told reporters, adding that the template they are eyeing is the 25-year deal that was first carried out for the country’s power transmission assets.
One possibility being explored by the company is to have not just one, but at least two concessionaires because the Agus plants 1 and 2 are sited within the jurisdiction of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), hence, that portion of the facility may be awarded to a separate concessionaire.
“It can be one concessionaire, or it can be two concessionaires, depending on how we structure the agreements,” he said.
Dela Serna conveyed that part of the package being mulled in the concession arrangement will be the rehabilitation of the hydro facilities to optimize their electricity generation to 800MW-level or higher.
He emphasized that while the nameplate capacity of the plants could hover at roughly 1,000 megawatts, the scale of generation has just been reaching 600 to 700MW this time because the facilities are now heavily de-rated; therefore, there is a need to immediately pursue their rehabilitation.
“In the past administration, there was a plan to conduct rehabilitation, so we can always package it as rehabilitation and concession at the same time,” he stated.
The PSALM chief executive further noted “the current O&M (operation and maintenance) is very much lower than the dependable capacity which is 600MW so the plan is to bring it back to 800MW, which I guess is the minimum. At the same time, what PSALM is lobbying, there’s plan to increase the capacity,” he stated.
Dela Serna qualified that under the Electric Power Industry Reform Act (EPIRA), the ownership of Agus-Pulangui plants “cannot be transferred, it has to remain with government.”
Based on that premise, he specified that the viable recourse will be a concession covenant with a private sector that shall be chosen via a competitive bidding.
“Via concession, the ownership remains with government then the O&M (operation and maintenance); the revenues and the beneficial rights would go to the concessionaire, so as part of that also, since it is a requirement of the government to rehabilitate the power plant, we will also require the rehabilitation,” he stressed.
But for that to be concretized, he similarly indicated that one requirement for PSALM to carry out is to seek the imprimatur of Congress on the planned concession deal to be entered by government for the Agus-Pulangui hydropower facilities.
“I need Congress, I need BARMM on this case because BARMM has preferential rights over Agus 1 and 2. I also need to consult Congress for the privatization plan of Agus and Pulangui,” he said.
The EPIRA stipulated that “the privatization of Agus and Pulangui complexes shall be left to the discretion of PSALM Corporation in consultation with Congress.”
