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The National Transmission Corp. (TransCo) has divested a portion of
its sub-transmission assets in Cebu to Visayan Electric Company Inc.
(VECO), the largest private utility in Southern Philippines.
The two parties yesterday signed a deed of
absolute sale transferring ownership of P171.75-million worth of
sub-transmission assets to VECO, which paid the amount in full.
TransCo’s deal with VECO is the first in the
Visayas and one of the biggest single cash sale of the
sub-transmission assets divestment program since it started in 2004.
The Energy Regulatory Commission has already given the transaction
the go-signal.
VECO, which is owned and managed by the Aboitiz
and Garcia families, distributes electricity to more than 275,000
customers in the cities of Cebu, Mandaue, Talisay and Naga and the
municipalities of Consolacion, Liloan, Talisay, Minglanilla, and San
Fernando in Metro Cebu.
The sale of TransCo’s assets to VECO involves
5.93 circuit kilometers, 33 line structures, and various substation
equipment connected to the Banilad-Mandaue and Banilad-Cotcot 69-kV
lines.
VECO also expressed willingness to purchase all
of TransCo’s sub-transmission assets within its franchise area and
those beyond in consortium with adjacent utilities. So far, the
company has signed three contracts with TransCo, with a fourth one
still being finalized.
The divestment of the power grid’s
sub-transmission assets or power lines typically rated at 69-kV and
directly connected to distribution utilities is mandated under the
Electric Power Industry Reform Act of 2001, which aims to spur
private sector participation in the once state-controlled power
industry.
Arthur N. Aguilar, TransCo president, said the
purchase of the company’s sub-transmission assets by electric
utilities allows these firms to make their power systems more
efficient and reliable.
“As the new owners, they will be allowed to
collect revenues directly from the operation and maintenance of
these lines. It is expected that would give the new owners the
incentive to continuously improve service for the end-users,” he
said.
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