UP to P1.2 billion of the loans incurred by Zamboanga City’s electric cooperative have been repaid so far by its investor-manager contractor, which is trying to make ends meet to stretch its capital infusion in the ailing power distribution utility.
The financial update comes months after the joint venture between Crown Investments Holdings, Inc. and Desco, Inc. won the right to manage and operate Zamboanga City Electric Cooperative, Inc. (Zamcelco) in a P2.5-billion bid to take over the city’s debt-ridden distribution utility.
Joseph Omar A. Castillo, lawyer of the joint venture and the authorized official to speak on behalf of the contractor, said the joint venture had completed a financial and technical audit of Zamcelco.
“As part of technical audit, we’ve learned that simple maintenance protocol was not followed. We didn’t expect the poor state of these facilities,” he told reporters last week.
His comments come as the Energy Regulatory Commission (ERC) holds a hearing this week on the petition by one of Zamcelco’s creditors, which claims to have not been paid of millions of pesos in energy sales.
Ahead of the hearing, both parties have scheduled a press briefing this week to give their side on the pending issues.
Mr. Castillo declined to comment on the matter but he said the joint venture partners were aiming to solve the financial woes of the electric cooperative, which had debts of at least P2 billion to its power suppliers when the contractor announced its takeover in September last year.
“In just less than four months, the new Zamcelco has installed brand new 5,855 meters, [and] brought in two transformers of 10 MVA (megavolt ampere) and 20 MVA to replace overloaded transformers in the Cabatangan and Ayala substations,” he said.
Mr. Castillo said the contractor had also fired up 22-megavolt of generator sets as emergency power to address voltage issues.
He said the power distributor had been debt-ridden since 2013, leading to the auction of an investor-management contract to help get it out of its financial problems and reduce its high systems loss rate of more than 23%.
“When the joint venture [partners] took over on Jan. 3, 2019, they have since performed a financial audit, technical audit, including reviewing all power supply contracts, and checked them against invoices before paying their obligations,” he said.
Mr. Castillo said the debt payments included those owed to state agencies National Electrification Administration (NEA) and Power Sector Assets and Liabilities Management Corp. (PSALM). He said the rest of the P2.5-billion bid amount that was not used to pay debts would be reserved for working capital.
“So far, the technical team of the JV (joint venture) has identified over P670 million of capital requirements much needed in replacement of key facilities and rehabilitation of substations,” he said. — Victor V. Saulon
