TransCo seeks P110 B from Malampaya fund

MANILA, Philippines - The National Transmission Corp. (TransCo) is proposing to tap around P110 billion from the Malampaya fund to build transmission projects, such as the Visayas-Mindanao Interconnection Project (VMIP), to close the loop of the national  power grid.

Energy Secretary Alfonso Cusi has directed the state-run firm to do all the interconnection projects of the power grid, TransCo president Melvin Matibag said.

“TransCo is looking forward to develop (transmission projects), that every island should be connected to the grid,” he said.

With that directive, TransCo is now drafting a position paper to use the Malampaya fund for these interconnection projects, which will be submitted to the energy and finance secretaries for approval, and then to Congress for sponsorship.

“I’m finalizing it. But in principle, even the secretary of finance agreed to it and the secretary (of energy) also,” Matibag said.

“We want to tap the Malampaya fund because we view the projects as energy development where you help consumers by not passing the cost to them. But we need legislation for that,” he added.

A legislative approval and the President’s nod are required in disbursing the fund since the law states it is reserved for energy resource development and exploitation activities

In its initial draft, Matibag said TransCo has estimated around P90 billion-P110 billion will be used for several interconnection projects. He said based on data from the Bureau of the Treasury, the Malampaya fund has a balance of P193 billion.

The fund represents royalties from the natural gas facility off Palawan that Shell Philippines Exploration Corp. (SPEx) is operating and which supplies most of the fuel requirements of power plants in Luzon.

Of the total, P52 billion is allocated for the VMIP, P2.6 billion for the Antique to Mindoro transmission line, P7.4 billion for the Bohol-Cebu connection and P1.9 billion to fasttrack the Panay-Negros line.

Other projects being eyed also include a transmission line between Sual Island to Davao, and another Visayas-Mindanao interconnection through a proposed bridge connecting Leyte to Mindanao.

However, these amounts are just benchmarked with the initial studies done by the National Grid Corp. of the Philippines (NGCP) and are subject to changes, Matibag said.

“There is a proposal to build a bridge connecting Mindanao and Visayas. We want to put up transmission cables on that bridge. It will be presented by DPWH (Department of Public Works and Highways) to the President. We will be part of it,” the TransCo chief said.

Grid operator NGCP has previously submitted to the Energy Regulatory Commission (ERC) its proposed P52-billion VMIP, which is targeted for completion by 2020. However, it has yet to be approved by the power regulator.

But if government pursues the project itself, it could be done faster since it can be classified as energy projects of national significance under Executive Order 30, Matibag said.

“Under the concession agreement, they’re exclusive of operations and maintenance. But when you develop the facilities, since we are the owner, we can still do that and I will invoke the benefits of the public,” he said.