NGCP still keen on Visayas-Mindanao grid connection
NGCP still keen on Visayas-Mindanao grid connection
The private firm says it can complete the P52-billion project by 2020 if it gets the go signal immediately, but it will also give way if the government decides to handle the project

MANILA, Philippines – Henry Sy Jr-led National Grid Corporation of the Philippines (NGCP) said it is still preparing to undertake the project connecting the Visayas and Mindanao power grids despite the government’s pronouncements that it should be a public project.

“Right now, this is what the contract states. We will not turn our back on our obligation. Unless we are told not to, we will proceed with the project,” said NGCP spokesperson Cynthia Alabanza on Saturday, May 6.

Alabanza noted that the NGCP was granted a franchise to maintain and operate the nationwide grid system for 25 years, and the firm “will proceed as we are mandated to do.”

Last year, the NGCP said the Visayas-Mindanao Interconnection Project (VMIP) was urgent as Mindanao is expected to gain substantial new capacity in the coming years which it can share with the power-starved Visayas.

The private firm has already done a study on the project, which it estimates would cost P52 billion and be completed by 2020.

“The 2020 target date is based on a compressed schedule, and assumes no delays. To get this done on time, we are hoping to receive the ERC (Energy Regulatory Commission) approval within 6 months or earlier,” Alabanza said.

“As soon as ERC grants us the Provisional Authority, NGCP will immediately put into motion plans that will lead to the eventual unification of the country’s 3 main grids.”

Government eyeing the project

The government has indicated, however, that it may decide to go in a different direction with the project.

National Transmission Corporation (TransCo) president Melvin Matibag earlier this month proposed that the state-run firm undertake the project using proceeds from the Malampaya funds in order to protect consumers from increased power costs.

TransCo owns the transmission assets in question.

“We will justify why it should be TransCo instead of NGCP that must undertake the project. That (P52 billion) will be an additional cost to the consumer. The concession period may end and the P52 billion may still not be fully paid off,” Matibag said.

“If TransCo will build the interconnection project, there will no longer be a pass-on cost to consumers since funding will be sourced from the Malampaya fund.”

The government’s take from the fund totaled P13.43 billion in 2016, slightly lower than the P14.32 billion recorded in 2015.

Energy Secretary Alfonso Cusi has also backed this proposal, saying that studies on how the project would be financed as well as the technical issues involved would be finalized by the 2nd quarter of 2017.

For its part, the NGCP said that should TransCo be given the go-ahead, it would give way and pursue other projects instead.

“If there is a change in the contract that will give the obligation to build [the] VMIP to another entity, then that is not a problem for us because we will just divert the funding or the capital expenditure to other projects,” Alabanza said. – 

Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.