- Category: Economy
29 Oct 2013
- Written by Lenie Lectura
SAN Miguel Corp. (SMC), through the SMC Global Power Holdings Corp., said on Tuesday it remains interested to participate in other “possible government projects,” which include joining bids for other distressed electric cooperatives (ECs).
“Yes, we are interested to join any bidding, in any possible projects. Yes, even electric cooperatives, but for now we still don’t know,” SMC President Ramon Ang said.
Ang’s statement came after Energy Secretary Carlos Jericho Petilla said any ECs which needs financial support will be presented to the private sector. Petilla mentioned that the Camarines Sur Electric Cooperative may be a candidate. “We are looking at other ECs but we don’t know the extent of their exposure. But we will present them to whoever may be interested,” Petilla said.
SMC Global Power is taking over the management of Albay Electric Cooperative (Aleco). A concession agreement was signed on Tuesday.
SMC Global Power is expected to shell out P350 million in separation payment to affected Aleco workers. Also, some P250 million will be earmarked for capital expenditure. The working capital, they said, will be determined until such time SMC Global Power starts to operate the EC.
SMC Global won the bid to take over the management of Aleco for 35 years.
SMC Global Power will not own Aleco. It will only “run and shoulder the debt and pay monthly concession fees,” Petilla said.
Aleco’s debt exposure to SMC Global amounts to P600 million.
At the ceremonial signing of the concession agreement, Ang said his company is committed to transform Aleco to an efficient and profitable EC.
“There will be a series of programs that include upgrading and constructing new substations and improvement of distribution lines. We are determined to invest in people by providing technical training to field personnel and also by improving their customer service,” Ang said.
Early this month, Albay Gov. Joey Salceda said SMC needs to spend at least P1 billion to rehabilitate the debt-ridden electric cooperative.
“At least P1 billion is needed to rehab or create a new organization for collection and systems improvement,” Salceda said.
“[Aleco] would be better off in the hands of the private sector. Today Aleco’s system loss is 24 percent compared to the cap of 13 percent,” Salceda said. “What happened to Aleco is its failure to collect and failure to bill. There’s also the systems losses because the equipment was obsolete,” Salceda said.
Nonetheless, SMC, he said, is expected to generate revenues of about P600 million annually from taking over the management of Aleco.
SMC Global has become one of the largest independent power generation companies in the country with an installed capacity of 2,545 megawatts (MW) to date.
The company had a 17-percent market share of the power supply of the national grid and 23-percent share of the Luzon grid as of end-2012.
The conglomerate plans to install a total of 3,000 MW of new capacity over the long term with new power plants that will be based on clean coal technology.