Dominguez wants Agus rehab prior to privatization

For the government to fetch higher proceeds, Finance Secretary Carlos G. Dominguez III is proposing that the Agus hydropower complex undergoes rehabilitation prior to its planned privatization.

“I am telling Secretary (Alfonso) Cusi, we have to rehabilitate it because that’s only operating at 40 to 50 percent capacity… we have to rehabilitate it first then maybe privatize the operations later,” the finance chief said.

Dominguez is the chairman of the board of asset-seller Power Sector Assets and Liabilities Management Corporation (PSALM), the government entity in-charge of privatizing or divesting the assets of the National Power Corporation.

The DOF secretary indicated that “privatization of operations” could be the best option for the 727-megawatt Agus that will be lumped with the 225MW Pulangui hydropower facility as a package.

Dominguez re-stated “the politicians in Mindanao don’t want to sell it,” hence, he asserted that there should be a “compromise” on how these assets can be placed under private sector charge so their efficiencies can be improved.

He said the total rehabilitation cost for Agus-Pulangui has yet to be studied; but once assessed, it may already be included in PSALM’s budget.

The privatization plan for the AgusPulangui hydropower complex is also the current hot topic at the Joint Congressional Power Commission (JCPC), with the Congressional body seeking for a financial study from the asset-seller firm to underpin their eventual recommendation on its divestment.

The Department of Energy, however, has been raising hesitation on the hydropower asset’s privatization given the extent of income – to the tune of R7.0 billion to R8.0 billion – that it brings to State coffers.

In fact, the energy department’s proposal would be to place it under the charge of the Philippine National Oil Company – Renewables Corporation, and treat it among the government-held power security assets.

“We want a security asset, we want that a government corporation is owning a facility that we can use as a catalyst or fallback or supplier of last resort when needed,” Energy Secretary Alfonso G. Cusi said.

For Mindanao stakeholders though, they want the hydropower facilities placed under a separate corporation and will just funnel potential earnings in bringing down their electricity rates.

The Agus and Pulangui plants were calculatedly excluded from the privatization exercise of the NPC assets for at least 10 years, and its fate on divestment would just have to be decided later on by the congressional oversight body of the power sector.