TransCo Now Operated by a Private Company

Now that TransCo is to be operated (the ownership remains with the Government) by China’s State Grid, a private entity, I have a lot of questions in mind that needs a concrete answer;

1. Would TransCo employees still get their much awaited salary increase once it was privatized? “I guess NO, remember that the concessionaire are Chinese Guys!”

2. Would TransCo still be enthusiastic to build new Transmission line project to ease line constraints? “I guess NO, why the hell they will do that?”

3. Can TransCo still use its expropriation privilege in acquiring Right of Way for its projects? “I’m not sure with this; I’m not inclined about the legal aspects of it”

4. Are they now required to remit corporate tax to the government? “I, recently, have a talk with one of the finance people of TransCo. She told me that as a government owned and operated corporation, TransCo is exempted to corporate tax but once it was privatized, Transco, like other private corporation, has to remit corporate tax to the Government. And of course, this will be at the expense of the electricity users.”

5. Given a regulated Maximum Allowable revenue (MAR) per year, (Php 33 Billion for 2007) and a winning bid of US$ 4.5 Billion, and a certain rate of return (should be at least 15%) what do you think will be the effect on its performance?

a.) high rate but high expenditure for projects?
b.) low rate but low expenditure for projects?

“in any case, neither is advantageous to electricity consuming public”

For our countrymen’s info, below is the list of some Transmission line projects that needs to be completed before 2012 and requires immediate action of the new TransCo operator.

1. Completion of the Batangas Transmission Reinforcement project (BTRP) to maximize the dispatch of Naturasl Gas Plants, geothermal plants and Calaca.
2. Upgrading of Binan – Sucat line to maximize dispatch of all South Luzon Plants
3. Upgrading of San Jose - Balintawak line and 500 kV San Jose Transformers to maximize dispatch of Plants in North Luzon, including hydro plants.
4. Upgrading of Leyte – Cebu line to maximize dispatch of Geothermal Plants in Leyte.
5. Completion of Abaga- Kirahon – Bunawan line to maximize dispatch of Agus hydro plants in Mindanao and increase its reliability.
6. Upgrading of Dasmarinas 500 kV Dasmarinas Transformers to maximize dispatch of Ilijan, QPPL, and Pagbilao.
7. Continuous repair and maintenance of Naga – Luzon Transmission line that is frequently damage by typhoons.