Power Grid eyes Filipino firm

Power Grid Corporation of India (PGCIL), the state-owned transmission major, is in the race to acquire a 10 per cent interest in the sole transmission company of the Philippines.

Acting in concert with Citadel Holdings of the Philippines, it plans to acquire the special purpose vehicle (SPV) being floated to take over and manage the assets of the Philippines National Transmission Corporation (Transco) for 25 years.

While Citadel, one of the largest private holding companies in that country with interests in aviation services, freight management and logistics and telecommunications, will hold 90 per cent, Power Grid will hold the remaining 10 per cent in the SPV.

The Philippines government is privatising Transco "� with a valuation estimated at $3.5-$4.6 billion "� as part of the market reforms led by President Gloria Arroyo to decrease the government's debt burden.

"We have the best chance to bag Transco because of our expertise in managing such assets and Citadel's ability to bring funds for the huge project. The Philippines government is expected to announce the qualified bidders in a day or two," said top level officials of Power Grid.

The Power Grid board has already approved the acquisition of the 10 per cent equity stake in the SPV. Apart from the Citadel-Power Grid combine, Terna of Italy, State Grid of China, Tenega of Malaysia and SNC Lavlin of Canada are also in the fray, along with local partners.

According to the global bidding norms set by the Philippines government, a local partner with a stake of 60 per cent or above is necessary to qualify for the bidding round. The bidding round is expected to begin in December this year.

Officials said that Power Grid, as the technical partner, would also get a technical fee for managing the assets, if the team wins the bid. Power Grid, which went public recently with an IPO of about Rs 3,000 crore, is planning investments worth over Rs 16,500 crore in power transmission projects in India and abroad.

The company is also implementing a nationwide power transmission infrastructure backbone, which includes revamping of existing power lines. It is also in the process of acquiring transmission projects in Afghanistan, Dubai and Nigeria, said officials.

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Overseas hunt

PGCIL may pick up 10 per cent in the SPV being floated to man the assets of Philippines' Transco

Terna of Italy, State Grid of China, Tenega of Malaysia and SNC Lavlin of Canada are also in the fray

PGCIL will also get a technical fee for managing the assets