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MANILA – More than a decade after its passage, a law meant to reduce National Power Corp.’s debt has failed to accomplish its objective.
Data from the Power Sector Assets and Liabilities Management Corp. showed that Napocor’s debt stood at $16.63 billion at end-October 2011, higher than the $16.39 billion outstanding in 2001 when Congress passed the Electric Power Industry Reform Act or Epira.
A creation of Epira, state-run Psalm blamed the unchanged level of debt on delays in the implementation of the law because of “several factors such as existing market environment at that time and various plant-specific issues that needed to be resolved.”
"Had the government completed the privatization of its power assets in 2001, the debts of [Napocor] would have been reduced to zero. However, the power privatization program started only in 2004. As a result, [Napocor] incurred new debts to effectively maintain the operation of its power plants," Psalm said.
At end-December 2011, Psalm raised $10.21 billion from the sale of Napocor’s assets.
Close to 80 percent of Napocor's generating plants – equivalent to 4,102.33 megawatts of capacity - has been privatized.
Likewise 77 percent of the company's contracted output with third party generators for a combined 3,593.91 megawatts. Also sold was the country’s power transmission line monopoly.
Of the amount generated from the asset sale, Psalm has collected $5.48 billion, as the bulk of its sales were made on installment.
"The collection, including income from interest, amounting to [$5.48 billion], was used to settle outstanding debts," Psalm said.
The sale of Napocor's generating assets, including de-comissioned plants, generated $3.01 billion to the total, of which $3.07 billion was collected.
The privatization of the power grid raise $3.95 billion, of which $1.765 billion has been collected, while the sale of Napocor's independent power producer contracts generated $3.229 billion, of which only $495.00 million has been collected.
Under the Epira, Napocor debts that will not be covered by the sale of its assets will be passed on to consumers through their electricity bills.
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