Joint venture wins bid to take over debt-saddled Zamcelco

THE JOINT VENTURE between Crown Investment Holdings, Inc. and Desco, Inc. won the right to manage and operate the ailing Zamboanga City Electric Cooperative, Inc. (Zamcelco) in a P2.5-billion bid to take over the city’s debt-ridden distribution utility.
In a statement during the weekend, the joint venture partners said the move was aimed at “immediately solving the financial woes” of the cooperative, which they described as saddled with debts of more than P2 billion to its power suppliers.
The joint venture said the facilities of Zamcelco need an upgrade to reduce its 23% system loss and avoid further power interruptions.
“The bid amount of the joint venture should immediately spur businesses in Zamboanga City,” they said, adding that Zamcelco previously failed in securing a bid for the investor-manager contract (IMC) for the past three years.
“The joint venture deems that this is the appropriate amount to pay all existing obligations, provide capital infusion to upgrade the facilities and improve the services of [Zamcelco],” it said.
The joint venture said while it is unfortunate that the bid process faced controversy, the process had been completed fairly. It noted the board stepped in at the right time to ensure that the process was free from any undue influence.
“The joint venture is prepared to immediately deposit the bid amount it offered and proceed to manage the cooperative in the most professional manner free from any political influence,” it said.
Crown Investment and Desco said their commitment to the bid had been proven by the signed contract as approved by the National Electrification Administration (NEA), the government agency overseeing electric cooperatives.
The joint venture said returns on the contract would be through performance-based targets, such as meeting NEA’s approved systems loss threshold and collection efficiency ratings. Four other bidders submitted technical qualifications, but did not file a financial bid.
Desco, Inc. is a participant in the country’s energy sector since 1974. Based at the Laguna International Industrial Park, the company with projects spanning across the country, has a net worth of P300 million.
Holding firm Crown investment has a fund portfolio from venture capitalist and financing support from local commercial banks. It is looking to invest in various energy and infrastructure projects in the country. — Victor V. Saulon