State-run Power Assets and Liabilities Management Corp. is studying the privatization of the Agus-Pulangi hydro complex in Mindanao through a concession agreement.
PSALM president Dennis de la Serna said he was hoping to get the approval of the Joint Congressional Energy Commission on the privatization of the hydropower project.
“We need to come up with a privatization plan for Agus and Pulangi, and then get approval for that. We are hoping a concession type of agreement is allowed by the JCEC or is approved by the JCEC,” De la Serna said.
The Agus-Pulangi hydro complex is one of the few remaining big-ticket power assets up for privatization.
The Electric Power Industry Reform Act of 2001 excluded the privatization of the Agus-Pulangi power plants for 10 years amid the strong opposition from Mindanao lawmakers.
PSALM has since then taken guidance from Congress on the Agus-Pulangi privatization which includes the Agus 1 and 2 hydroelectric power plants (260 megawatts) in Marawi/Saguiran, Lanao Del Sur; Agus 4 and 5 HEPPs (213 MW) in Baloi/Iligan City, Lanao Del Norte; Agus 6 and 7 HEPPs (273 MW) in Iligan City, Lanao Del Norte; and the Pulangi 4 HEPP (255 MW) in Maramag, Bukidnon.
“The issue is now the ownership of Agus-Pulangi, especially that BARMM [Bangsamoro Autonomous Region in Muslim Mindanao] has preferential rights to the Agus complex under the BARMM law,” the PSALM executive said.
“We’re thinking that instead of transferring the ownership of the assets to a different entity, in a concession agreement, the asset remains with the government and the O&M [operations & maintenance], the necessary CAPEX, the necessary rehabilitation and therefore the revenues derived from the operation of the asset is now for the privatized entity,” De la Serna said.
He said the proposed concession agreement as a form of privatization would address concerns over ownership of the power plants.
“So at least we address the ownership issues being brought up by Congress and by the national government and we still fulfill the mandate of PSALM that we are able to privatize,” he said.
De la Serna said the Marcos administration wanted the winning concessionaire to rehabilitate the Agus-Pulangi power plants.
“It’s very clear coming from this administration that the rehabilitation needs to be done by the private party. I agree with that plan so that’s why under the concession agreement we will require rehabilitation of the power plant,” he said.
“If we are able to privatize it under a concession agreement, it is the privatized entity that will rehabilitate it,” De la Serna said.