Olongapo SubicBay BatangGapo Newscenter

Tuesday, May 06, 2008

Zambales gets P204 M from sale of power plant

In payment of sales and land-transfer taxes to provincial gov’t

MASINLOC, Zambales – As a result of the transfer of the 600-megawatt Masinloc coal-fired power plant to its new owner, the provincial government received more than P204 million in payment for sales and land-transfer taxes.

The acquisition of the Masinloc plant by AES Corp., a reputable, experienced independent power producer (IPP), was seen to enhance the competitive edge of the Philippine market for electricity generation.

It is expected that in the long run, this would help bring down electricity prices.

During a simple ceremony, Zambales Gov. Amor Deloso received from Masinloc Power Partners Co. Ltd. (MPPCL) President Mathew Bartley and MPPCL Chief Finance Officer Hassaan Mirza a symbolic check for R204,600,000 in payment of sales tax.

Deloso told reporters that the tax revenues derived from the sale of the Masinloc plant located in Barangay Bani here would be used to fund projects aimed at improving the delivery of social services and meeting much-needed infrastructure requirements of the province.

The facilities and operations of power plant was also formally turned over to AES Corp., one of the world’s largest global power companies.

Bartley said that AES has already paid the whole amount of $ 930 million to the Power Sector Assets and Liabilities Management (PSALM). The amount is in payment for the total winning bid price of the coal plant last month.

Deloso said that the provincial government is projecting a 30-centavo reduction in power rates per kilowatthour in the electric bills of household power consumers in the coming months. He described the revenue and other powerrate reduction as a windfall that will directly benefit his constituents.

AES is eyeing the upgrading of the plant’s capacity from 600 MW to 1200 MW in the next five years.

In a statement, AES President and Chief Executive Officer Paul Hanrahan said that the "acquisition is a key component of our strategy to invest in areas where there is a significant need for new capacity and offers AES an excellent entry point into the growing Philippine economy through the lowest cost thermal plant in the system."

"This is a particularly attractive investment because the existing facility has the infrastructure in place to allow AES to add 600 megawatts to our generation capacity," AES said.

Approximately 60 percent of the electricity generated at the Masinloc plant will be sold to electric distribution companies, cooperatives, and special economic zones through power-supply contracts of various terms.

The remaining capacity will be sold through the wholesale power pool or under new contracts.

The government hopes that the operation of the power plant will improve the investment climate by ensuring the reliability of the generating capacity for commercial and industrial uses. By FRED ROXAS - Manila Bulletin

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