The National Irrigation Administration (NIA) has transferred 60 percent of its 100 percent ownership over the massive P33.75 billion Casecnan Multipurpose Irrigation and Power Project (CMIPP) to the Power Sector Assets and Liabilities Management Corporation (PSALM).
This was formalized through the signing of a Memorandum of Agreement (MOA) between two government agencies recently held at NIA’s office in Quezon City. The transfer of ownership would make PSALM majority owner of CMIPP with 60 percent and NIA will be left with 40 percent.
During the signing ceremony, NIA was represented by Administrator Ricardo R. Visaya, while PSALM by its President and Chief Executive Officer Irene Joy Besido-Garcia.NIA Deputy Administrator for Administrative and Finance Sector Engr. Freddie M. Toquero and Central Office Department Managers were also present during the MOA Signing.
According to NIA, the MOA is pursuant to the Economic Development Cluster (EDC) Resolution No. 02, series of 2021, providing the resolution that NIA shall implement the transfer of its 60 percent ownership share over CMIPP to PSALM.
Under the MOA, NIA agreed that PSALM shall procure the Operation and Maintenance (O&M) Service Contract, under Republic Act No. 9184 (Government Procurement Reform Act), to operate, manage, and maintain CMIPP’s power generation facilities and non-power generation facilities, such as weather stations and access roads from December 11, 2021 until its eventual privatization.
In addition, NIA and PSALM shall work together to ensure that CMIPP’s irrigation function and power generation are preserved and maintained.
In terms of electrical energy trading, PSALM will continue to be the registered marketing participant in the Wholesale Electricity Spot Market’s (WESM) database and be responsible for selling, trading, and/or allocating to its customers/WESM the net electrical energy generated by CMIPP’s power generation facilities until the project’s privatization is completed.
Meanwhile, NIA and PSALM agreed to share all net revenues and expenses, accruing from the project beginning December 11, 2021, following their 60-40 ownership ratio.
For cost-sharing and billing arrangement, NIA and PSALM shall proportionately share in the net income or loss from the project’s monthly operations.
“The Parties shall discuss the protocols in the implementation of sharing and billing arrangements, including the accounting procedures for the same. It was agreed upon that PSALM will pursue the privatization of CMIPP, with the understanding that NIA and PSALM will share in the net proceeds in accordance with their 40-60 ownership interest,” NIA said.
CMIPP was successfully undertaken through a Build, Operate, and Transfer (BOT) agreement between NIA and Cal Energy Casecnan Water and Energy Company, Inc. (CECWEC) on November 13, 1994.
The project has a total cost of $675 million, P33.75 billion, and involves the construction of a 26.27-kilometer, 6.50-meter diameter transbasin tunnel traversing Caraballo Mountains with a capacity of 80 cubic meters per second (cms) capable of diverting at least 800 million cms of water per year to the Pantabangan Reservoir.
It also involves the construction of two diversion weirs in Casecnan and Taan Rivers in Nueva Vizcaya, including 80.46-kilometer access roads that connect to local municipal and provincial road networks.
Two generator sets were also installed generating a combined power of 150 MW and a 230kV Switchyard wherein the National Power Corporation’s (NPC) transmission lines were connected. The power produced in the plant is supplied to the Luzon Grid.
On December 10, 2021, CECWEC conducted the Turnover Ceremony of the Casecnan Hydroelectric Power Plant to NIA and PSALM.