The National Grid Corp. of the Philippines (NGCP) Department of Information and Communications Technology (DICT) have agreed to partner for the development of the National Broadband Program (NBP) until the lapse of the grid operator’s concession.
Both parties reached a mutual decision in relation to NGCP’s fiber-optic capacity that will be made available for use of third parties in the implementation of the NBP. To seal this, an agreement would be signed soon.The decision was reached recently after NGCP President and CEO Henry Sy Jr. and the officer in charge of the DICT, Undersecretary Eliseo M. Rio Jr. met.
Essentially, the DICT committed to partner with the NGCP on the use of transmission facilities as backbone for the NBP for the duration of the grid operator’s concession, which expires in 2034. “NGCP will enter into the agreement up to the life of its concession, which is until 2034, provided that, in the event that the concession is extended, the bilateral agreement will also be extended,” the company said. The NGCP earlier reiterated that it is willing to enter into a bilateral agreement with the government for the lease of its available fiber-optic capacity for use of third parties at no cost.
NGCP’s existing fiber optic cable network enables real-time communication between transmission facilities, and with generators and distribution utilities. The fiber-optic capacity to be leased out by the company uses transmission facilities. Allowing government or third parties to “piggyback” on this transmission-communication backbone will be critical in the immediate implementation of the government’s NBP.
“The core of the matter is who owns the dark fiber of NGCP/Transco. When it is turned over to Transco [National Transmission Corp.], whatever agreement was done with NGCP may be modified, changed or reviewed by Transco,” Rio said.
NGCP is a Filipino-led, privately owned company in charge of operating, maintaining and developing the country’s power grid, led by majority shareholders Sy and Robert Coyiuto Jr.
It has been awarded a 25-year concession deal to operate and manage the transmission facilities. However, Transco still owns the assets.
The DICT and Transco may opt to enter into a separate agreement. NGCP said it will not object to it “for so long as the exclusive rights of the company in relation to transmission and related businesses for the entire duration of its concession are upheld.”
“We are not interested in entering the telecommunications business. Transmission operation remains to be the primary business of NGCP. The lease of available fiber-optic capacity is specifically allowed under our concession as a ‘related business to maximize the utilization of its assets.’ Such lease agreement is contemplated by our concession and franchise and is not considered our primary mandate,” the company stressed.
NGCP’s available fiber-optic capacity can potentially support both the needs of the government and a private party. “Should the government use only a portion of the fiber-optic capacity available for use of third parties, NGCP may also enter into other bilateral contracts with interested telecommunication companies based on the contract with government, for the use of the remaining capacity. Under the Epira [Electric Power Industry Reform Act], 50 percent of the net income from these bilateral contracts will be used to reduce transmission rates. But priority use remains with NGCP’s internal communications purposes and the government’s NBP.”