By Myrna M. Velasco
State-run Power Sector Assets and Liabilities Management Corporation (PSALM) is now working on the privatization design for the National Power Corporation (Napocor) complex in Quezon City, but the main condition of the government is for the takers to integrate “government energy offices” into the privatized property.
PSALM President Irene Joy B. Garcia said that is a major bargaining chip that the government will set on the table with the property developer to allow the construction of a building that will house energy-related government offices – like the NPC, PSALM and the Energy Regulatory Commission.
“We will move them to that building, the ‘Power Center’ that will be constructed, that’s where we will put them,” she said.
The template for that arrangement, she said, was how it was done at the Fort Bonifacio Global City in Taguig where there are certain buildings allotting free space for government offices.
“At BGC, the way they did it, they computed the floor area of the government offices that they will need the offices for. Then they made it free rent for government offices, and then the private entity will put the capital to construct the building, then beyond those allotted for government offices, they can rent out the rest of the floors,” she explained.
PSALM is now sorting out the terms for the engagement of a third party consultant that will draw up the design concept for the privatization of the Napocor complex.
“We will have first to do the design concept and then the master planning before we bid out the privatization,” Garcia said.
The PSALM chief executive went on to say that whoever wins in the bidding for the design concept, that entity will be given three months to prepare and finalize the design of the propounded mixed-use commercial developments of the NPC property.
At this stage, she indicated that the preferred mode of privatization is a joint venture (JV) – meaning, PSALM will have to partner with a private sector property developer – instead of pursuing an outright sale of that piece of government real estate asset.
“It’s not necessarily just selling it out as a property, it could be like a joint venture of some form with the private entity, the one that will construct the building…so it could be like a joint venture arrangement, we have to study what is the most optimal way that we can generate the most proceeds,” Garcia stressed.
For share of revenues that will flow, she noted that PSALM will do the collections throughout its remaining corporate life or until 2026, then it will turn over everything to the national government at the cessation of its existence.
“Based on the rules of the EPIRA (Electric Power Industry Reform Act), after the life of PSALM, we will have to turn over everything to the national government. What we just want to make sure is we will try to optimize whatever we can do in the next eight years and then we’ll turn it over to the government,” she expounded.