MANILA, Philippines – San Miguel Corporation (SMC) president and Chief Executive Officer Ramon Ang is still interested to partner with Korea Resources Water Corporation (K-Water) to operate and manage the 218-megawatt (MW) Angat hydro power plant despite delays in the facility’s turnover.
“Yes, we are still interested,” Ang said on Friday, August 29, adding that San Miguel will pursue a team up with K-Water.
In a disclosure in August 2013, San Miguel reported that it had been in talks with the South Korean firm that won the 2010 bidding for the right to operate and manage the hydro power plant.
In May this year, it was reported that San Miguel and First Gen Corporation of the Lopez group would partner with K-Water. The parties will form a special purpose company (SPC), where San Miguel and the Lopez group will have a 60% stake, while K-Water will hold the remaining 40%.
San Miguel has been eyeing a stake in the hydro power plant as part of its expansion into the energy business.
K-Water won the bid in April 2010 to privatize the facility. It placed a bid of $440.8 million, besting offers from San Miguel and other bidders, including First Gen Northern Energy Corporation, SN Aboitiz Power, and Trans-Asia Oil and Energy Development Corporation.
Gov’t approves sale at reduced bid
The sale was supposed to be finalized March of this year. However, it is taking a long time time to secure regulatory approvals.
In particular, Power Sector Assets and Liabilities Management Corporation (PSALM) President Emmanuel Ledesma had said that the necessary business permits and Bangko Sentral ng Pilipinas (BSP) registration of K-Water’s loan have yet to be secured.
There was also a case filed by non-governmental organizations before the Supreme Court, questioning the constitutionality of the transaction. This delayed the turnover of the assets to K-water.
In October 2012, the High Court eventually upheld the sale of the Angat power plant to the Korean company.
PSALM’s Ledesma confirmed the August 27 report that the government has accepted a lower purchase price for the Angat hydro power plant,.
K-Water’s bid was reduced to $439 million from an original $440.88 million in 2010, citing results of the capacity-testing of the main units 2 and 3 under the Asset Purchase Agreement.
K-Water previously demanded that the Philippine government reduce the $440 million project price citing the deterioration of the facility and several changes the Philippine government had madein the agreements signed by both parties.
No date has been set for the turnover of the facility.
The hydroelectric plant is composed of 4 main units, each with a 50-MW capacity, and 5 auxiliary turbines. Units 4 and 5 are owned by the Metropolitan Waterworks and Sewerage System, which has bid out the rehabilitation of the generating facilities.
Angat Dam supplies about 90% of raw water to Metro Manila and irrigates about 28,000 hectares of farmland in Bulacan and Pampanga. – Rappler.com