Psalm voids NGCP prepayment of concession fee

STATE-RUN Power Sector and Assets and Liabilities Management National Grid Corp. of the Philippines’ (NGCP) prepayment of its concession fee.

In a letter on Wednesday, Psalm said the NGCP’s prepayment of P57.88 billion to the company in July 2013 has not considered valid under a concession agreement that prohibits that move if arrears need to be settled.

The amount was meant for the grid operator’s 10th to 30th deferred payments for concession fees. It represented 51.59 percent of the outstanding concession fee as of July 16, 2013.

Instead, the P57.88 billion was used to settle maturities between January 2014 and January 2018 under a deferred payment amortization schedule.

This came ten months after government- owned National Transmission Corp. ( TransCo) sent Psalm a letter opposing the prepayment for the reason the government would lose income worth billions of pesos.

TransCo President and CEO Melvin Matibag said the grid operator had to settle the arrears and contested collectibles amounting to P3.92 billion from the first prepayment in 2013.

The prepayment would result in TransCo losing P26.07 billion in a 11-year period: P12.62 billion for 2013 to 2016, P9.95 billion for 2017 to 2020, and a projected P3.5 billion for 2021 to 2024.

NGCP is a privately owned company responsible for operating, maintaining and developing the country’s power grid.

Established under Republic Act 9136, or the Electric Power Industry Reform Act of 2001, TransCo managed and operated the country’s transmission system until it turned over these functions to the NGCP on January 15, 2009. It still owns all transmission assets nationwide.