Mayor Gordon and CEPALCO Ink Asset Purchase Agreement
Mayor James “Bong” Gordon Jr. and Hochi Abaya, chairman’s representative of Cagayan Electric Power & Light Company, Inc. (CEPALCO), has signed the Asset Purchase Agreement for Olongapo City’s Electric Distribution System at the FMA Hall, City Hall last July 14, 2010.
This is in accordance with Resolution No. 60 (series of 2010) which authorized the Mayor to sign and execute the final asset purchase agreement for the sale and modernization of the city’s electric distribution utility system and to determine the use of the asset proceeds.
The City Government under the administration of Mayor James “Bong” Gordon, Jr. sees the need to modernize and upgrade the facilities and equipment of the power distribution system in the city through the private sector participation or PSP.
In line with this, the Bids and Awards Committee (PBAC) conducted a public bidding for the sale of Olongapo PUD last June 9, 2010 which resulted into a failure because bidders did not meet the Reserve Price of P610.5 M set by the city. However, further negotiation with CEPALCO, which is the highest bidder, resulted to its conformity to the Reserve Price.
The sale of the City’s electric distribution system will be used for the payment of obligations with the National Power Corporation (NPC) and San Miguel Energy Corporation (SMEC), and for the settlement of separation, severance or early retirement pay of affected PUD employees.
Mayor James “Bong” Gordon Jr. and Mr. Hochi Abaya, representative of Cagayan Electric Power & Light Company, Inc. (CEPALCO) shake hands after the signing of the “Asset Purchase Agreement of Olongapo City’s Electric Distribution System” held at FMA Hall, City Hall last July 14, 2010. pao/christopher