Agus-Pulangi rehab award eyed by yearend

THE GOVERNMENT is targeting to award the rehabilitation contract for the Agus-Pulangi hydropower complex by yearend as it pushes to restore the aging Mindanao facility’s full generating capacity through a public-private partnership, an energy official said.

“We hope to proceed by December,” Energy Undersecretary Mario C. Marasigan said in an interview last week.

The Agus-Pulangi hydropower complex, which straddles the provinces of Lanao del Norte, Lanao del Sur and Bukidnon, is designed to generate 982 megawatts (MW) of electricity through seven run-of-river hydropower plants.

However, only about 700 MW of the facility’s capacity is currently operational due to aging infrastructure.

To improve the reliability of clean energy generation in Mindanao, state-run Power Sector Assets and Liabilities Management Corp. (PSALM) is pursuing the rehabilitation of the Agus-Pulangi assets with private sector participation.

Mr. Marasigan said PSALM has engaged a third-party consultant to serve as transaction adviser for the preparation of the terms of reference and other requirements for the project.

To facilitate the rehabilitation, PSALM is considering granting the winning bidder a concession agreement in line with Republic Act No. 11966, or the Public-Private Partnership Code of the Philippines.

Once awarded, the rehabilitation is expected to run from 2028 to 2032, beginning in the final year of the administration of President Ferdinand R. Marcos, Jr.

Energy Secretary Sharon S. Garin said the project would remain protected from political transitions once a contract is awarded.

“Once there is an award that they will do the rehabilitation, there’s a contract with the government. You cannot just violate that because of change in the administration. There’s a contractual obligation. That’s the basic rule,” she said.

Jericho B. Nograles, president and chief executive officer of National Power Corp. (Napocor), said the operation and maintenance of the hydropower complex would remain under Napocor even after the rehabilitation project is awarded.

“Basically how it works like currently, PSALM is paying Napocor for operations and maintenance. So regardless of what happens, Napocor will still be paid to operate and maintain the Agus-Pulangi complex,” he said.

Under the proposed arrangement, PSALM will enter into an agreement with a private firm that will undertake the rehabilitation and sell electricity generated by the facility.

PSALM President and Chief Executive Officer Dennis Edward A. Dela Serna earlier told BusinessWorld that two unsolicited proposals from power generation companies are currently being evaluated for the project.

Under Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001, PSALM is mandated to privatize government-owned power assets and use the proceeds to settle the financial obligations of Napocor.

The state-run firm has also prepared a 10-year plan to liquidate its remaining liabilities. — Sheldeen Joy Talavera