MANILA Electric Co. (Meralco), the country’s largest power utility, and its consortium partners have signed a joint venture agreement with the Bases Conversion and Development Authority (BCDA) to manage the distribution of electricity in New Clark City.
Under the agreement, the consortium will put up a special purpose company that will have equity stake equivalent to 90% in the joint venture company (JVC)to be formed with the BCDA.
“The JVC shall then pursue and undertake the financing, design and engineering, establishment, construction, development, and operation and maintenance of the electric power distribution system in New Clark City,” Meralco told the stock exchange on Thursday.
Aside from Meralco, the consortium is comprised of Marubeni Corp., The Kansai Electric Power Co., Inc., and Chubu Electric Power Co., Inc.
Meralco, which has a customer count of around 6.5 million, owns a 60% equity stake in the consortium.
Lawrence S. Fernandez, Meralco vice-president and head of utility economics, said in a chance interview that the consortium partners had set certain “milestones” in order to meet the requirements of the Southeast Asian Games (SEA) in November.
“October is the date when we really have to be ready for preparations for Southeast Asian Games. We will have a substation plus distribution system,” he said.
“When they released the bid rules they said that the estimated capital expenditure for the DU (distribution utility) is around P6.3 billion for the 25 years of the utility,” Mr. Fernandez said. “Siyempre (Of course), it will come as the load comes.”
In December last year, BCDA said the Meralco-led consortium offered the lowest power distribution rate for New Clark City. The consortium submitted a tariff bid of P0.6188 per kilowatt-hour (kWh).
The rate is lower than the P0.9888/kWh proposal put forward by the Aboitiz-KEPCO consortium of Olongapo Energy Corp. Both bids were below the P1.25/kWh tariff limit set by BCDA.
The first phase of the New Clark City development covers the construction of the so-called National Government Administrative Center and sports facilities, which will host the SEA Games this year.
Mr. Fernandez previously said the award was given on Jan. 18, 2019. BCDA aims to transform New Clark City into the country’s first smart and green metropolis. — Victor V. Saulon
