|
SHOULD
the government fail to privatize the National Power
Corp. (Napocor), as called for under the Electric Power
Industry Reform Act of 2001 (Epira), the country could
suffer a power crisis similar to what it had in the
1990s—with dire consequences for the economy, according
to a US-based think tank.
“Overall, the risk of the prevailing uncertainty in the
power sector is that more delays in the privatization
program can potentially damage economic growth should
the needed investments in power-generation capacities
fail to materialize,” said GlobalSource in its latest
report, titled “Power Struggles” and authored by Romeo
Bernardo and Marie-Christine Tang.
GlobalSource’s report also underlined the risk of
returning to the rotating blackouts that had led to the
bailing out of the economy at great cost—including,
according to some energy observers, the resort to
onerous independent power contracts—and this may have to
be done again over the medium term.
GlobalSource said the private sector, particularly those
who have already bought into the power sector, are
concerned that open access ushering in full
competition—where electricity buyers of a certain size
can freely shop for suppliers—may not happen soon
enough, although it noted that the government aims to
complete 70 percent of privatization by end-2008.
In light
of recent developments, industry players have grown
doubtful this will be achieved, which would “be a pity
since fast-tracking privatization would bring in a
critical mass of players.”
The
think tank added that since Epira’s passage in 2001, the
law setting out the restructuring of the power sector
has gone through a slow start and progressed in what
seems like fits and spurts.
GlobalSource said last year turned out to be one of the
good years for the Power Sector Assets and Liabilities
Management Corp. (PSALM), which disposed of some of the
large generating assets, notably the coal-fired power
plants Masinloc and Calaca, each with a rated capacity
of 600 megawatts.
PSALM
managed to offload via a concession agreement with the
National Transmission Corp. (Transco), whose franchise
from Congress is expected to be awarded this year.
By the
end of 2007, GlobalSource said the PSALM had privatized
over 40 percent of the Napocor generating assets, and
the government finally came within sight of its
70-percent asset sale goal.
Then a
sense of uncertainty settled anew over the industry
after PSALM opened up other generating assets for sale
in the early part of this year, about which GlobalSource
cited an article from the Wall Street Journal saying the
Philippine government seems to be back-tracking on its
commitment to privatize the electricity industry. |
