October 27th, 2021
Without objection, the House Committee on Energy agreed to extend the corporate life of Power Sector Assets and Liabilities Management (PSALM) Corporation for another 30 years. House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district), one of the principal authors of the measure, said that the measure will help government avoid having to shoulder what he estimates to be P198 billion in PSALM liabilities by 2026, when the corporation is set to expire under its original charter.
“We were supposed to have exhausted all of PSALM’s debts by 2026, if it were not for the COVID-19 pandemic. The privatization of certain assets was delayed due to this crisis.”
“One example is the proposed development of the National Power Corporation (NPC) property in Diliman, Quezon City, for example, into a mixed-use commercial complex. We won’t have it done by 2026, so that effort will warrant the corporate life extension of the state-run corporation.”
“If we can run the place the way BCDA succeeded with efforts like Clark and Fort Bonifacio, I think we will be able to retire all of PSALM’s debts and even start making money out of it by around mid-2030s.” Salceda said.
“BCDA did excellent work especially in New Clark City. That should be the model for the Diliman complex.”
“The Quezon City estate is not insignificant, mind you. It’s a 5.2 hectare property owned by the National Power Corporation, and will be converted into something like BGC. But because of COVID, PSALM had to make certain readjustments to the development plan,” Salceda added.
Comprehensive plan needed
Salceda however emphasized that PSALM has to have a plan for the use of proceeds from privatization efforts over the course of the 30-year extension of its corporate life.
“I’d like to emphasize to PSALM that this is not a blank check from Congress. We want certain milestones and benchmarks.”
“Certainly, over the course of the extension, PSALM will begin to be on the green. So, I want to know how these gains will be allocated,” Salceda added.
“I think we should invest gains in renewable energy and modernizing energy infrastructure.”
“We need a radical reorientation of the power sector, away from coal and other volatile commodities. This reorientation will include investments in indigenous renewable energy. Agus-Pulangi hydroelectric power plants will be critical in this regard. The PSALM continues to own them, and Napocor will continue to operate them once the rehabilitation is completed. The World Bank is already financing the project,” Salceda said.
“PSALM needs to give us timelines on this. I also think there is a certain check-and-balance in having a state-run this plant, especially if they will supply to WESM. It could undercut pricing abuse in the spot market,” Salceda added. #