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Leyte-Cebu linkup project to bring power to region by ’05
The Philippine Star, 28 October 2003
By: Donnabelle L. Gatdula
The National Transmission Corp. (Transco) made the assurance yesterday that the $68.5-million Leyte-Cebu interconnection project will start supplying much-needed additional power to the Cebu-Negros-Panay subgrid by the first quarter of 2005. Transco gave this assurance during the formal contract signing with the winning turnkey contractor, the Japanese consortium of J-Power Systems and Kanematsu, at the Department of Energy compound. The contract was signed by Transco president Alan T. Ortiz and Juniche Yuge, Director of Kanematsu Corp.
The formal contract signing followed the notice of award given by Transco's board to J-Power-Kanematsu on Sept. 1 following the successful electronic bidding for the project last July 30. Ortiz said the only other major requirement to be hurdled before the project could commence is the formal loan negotiations which will begin immediately after the contract signing, which is expected to be wrapped up by next month. "We expect that we will be able to obtain better loan terms for the project," he said, adding that the Leyte-Cebu project will bring significant improvements in the long-term.
Being the implementor of the Leyte-Cebu uprating project, Transco is the designated signatory to the supply contract. However, since the asset transfer proceedings being undertaken by the three entities that have resulted from the implementation of the Power Reform Act - PSALM, Napocor, and Transco - have yet to be completed, Napocor will still be the signatory to the loan agreement. The negotiating team for the loan agreement is headed by the Department of Finance with representatives from both Transco and Napocor. Under the financing scheme submitted by J-Power-Kanematsu, the Japan Bank for International Cooperation-International Finance Office (JBIC-IFO) will finance 85 percent of the contract amount, or about $62 million, while the Standard Chartered Bank-Manila Office will issue notes that will cover the remaining 15 percent peso financial requirement for the project.
The Leyte-Cebu line currently transports a maximum of 200 megawatts (MW) of power from the geothermal fields of Leyte to the power-needy islands of Cebu , Negros and Panay . Once the uprating is completed in 15 months, the Cebu-Negros-Panay subgrid will be able to utilize an additional 200 MW of power from Tongonan, Leyte to help reduce its growing supply deficit.
The project entails the installation of a second circuit submarine cable from Leyte to Cebu spanning 32.5 kilometers. Ortiz said as part of the transmission firm's commitment to provide additional power to the region, Transco is in the process of evaluating the bids for the $40-million Cebu-Mactan interconnection project which it hopes to award by December. The project, set for completion in October 2005, will benefit not only the Mactan Export Processing Zone but also key economic hubs in the region as well. For his part, Energy Secretary Vincent S. Perez said the two projects will significantly improve the power situation in the Visayas. "With these two projects, we expect to prevent a power shortage and solve the looming power crisis in Cebu and the rest of the region," he added. Back to Newsclippings | To top
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