NEA backs venture’s P2.5-B Zamcelco deal

STATE-LED National Electrification Administration (NEA) has backed the investor-manager contract (IMC) forged by Zamboanga City Electric Cooperative (Zamcelco) as it advised the board of the distribution utility to proceed with a meeting this week for its members to approve the P2.5-billion deal.
NEA Administrator Edgardo R. Masonsong told reporters the offer to take over Zamcelco was “truly great” and a deal that the utility could not refuse.
On Aug. 31, the board of Zamcelco awarded the contract to the joint venture of Crown investments Holdings, Inc. and Desco, Inc. The joint venture won the bid to manage the operations of the utility and address its financial woes.
Zamcelco is saddled with more than P2 billion in debts to its power suppliers.
Mr. Masongsong advised Zamcelco to proceed with its Sept. 11 general membership meeting and ensure compliance with all notice and consultation rules.
“To consummate that (IMC contract), [Zamcelco] needs the annual general membership confirmation after that it will be forwarded to NEA for evaluation and confirmation,” he said.
Mr. Masongsong admitted the offer of the Crown investments-Desco joint venture is “too tempting, adding further delaying the process could result in the cooperative incurring more debts.
The NEA chief said the agency was looking at similar deals for other ailing cooperatives, while exploring other options such as an executive order from President Rodrigo R. Duterte that would pave the way for debt condonation.
He said NEA along with the Department of Energy and the Department of Finance have backed the government takeover of Lanao del Sur Electric Cooperative, the utility within war-torn Marawi City, through a law.
Mr. Masongsong said the draft executive order had already been submitted to the Office of the President for signing.
“[It’s now] beyond our control,” he said. — Victor V. Saulon