Monthly Archives: October 2011

Swiss challenge for Iligan plant held up

BusinessWorld Online
October 23, 2011

CAGAYAN DE ORO — The Iligan City council has deferred the Swiss challenge for the 103-megawatt Iligan diesel-fired plant complex as it awaits the Commission on Audit’s recommended updated ceiling price for the power asset.

Conal Holdings Corp., under the Alcantara Group, last year submitted an unsolicited offer of P300 million for the two-plant complex.

While the period for the Swiss challenge was originally scheduled to end on Oct. 13, the city council decided last week to hold off the exercise until the Commission on Audit (CoA) recommended a ceiling price, Councilor Moises G. Dalisay, Jr., chairman of the ad hoc committee on the power plants’ disposal, said in a telephone interview last weekend.

Norberto J. Oller, vice-president of the Lanao Power Consumers Federation, noted in a separate phone interview that previous appraisals placed the power complex’s value at P2.1 billion (CoA, in a 2007 report), P1.9 billion (National Power Corp.) and P1.8 billion (Lanao Consumers Federation).

The City of Iligan acquired the 7.9-hectare power plant complex under a compromise agreement with the Power Sector Assets and Liabilities Management Corp., following the latter’s failure to settle real estate tax liabilities for the asset.

The $110-million power plant complex was commissioned in 1993 as a joint build-operate-transfer (BOT) undertaking of the Alcantara Group and Tomen Corp. of Japan, called Northern Mindanao Power Corp. (NMPC).

Previously designated as NMPC-1 (60.9 megawatts) and NMPC-2 (42 megawatts), the plants were renamed as Iligan Diesel Power Plant 1 and 2 when ownership of the two units was turned over to the National Power Corp. on July 31, 2003 and on Feb. 9, 2006, respectively, after the BOT contract expired.

Three investor groups subsequently expressed interest to bid for the power plant complex and conducted due diligence on the units.

However, only Conal Holdings and Energy Developer Co. Ltd. of Seoul, South Korea — a company involved in renewable energy generation — were eventually deemed qualified by the city’s bids and awards committee to vie for ownership of the plant. — M. D. Baños

Upgraded Tawi-Tawi airport draws commercial airlines and interest from investors

BusinessWorld Online
October 21, 2011

BONGAO, TAWI-TAWI — Once considered one of the most inaccessible provinces in the country, Tawi-Tawi is experiencing a surge in business activity and investor interest. Through a partnership between the Philippine and US governments, the Tawi-Tawi airport runway was upgraded.

This month, Cebu-Pacific begins new commercial flight routes daily from Zamboanga City to Sanga-Sanga airport in Bongao, Tawi-Tawi, using an Airbus A319.

Earlier, Airphil Express began flying a 77-seater along the same route, with connecting flights to Manila and Davao.

“The presence of two commercial airlines means more competitive transport rates, which is good for business,” said a local entrepreneur.

The Department of Transportation and Communications, the provincial government of Tawi-Tawi, the Civil Aviation Authority of the Philippines (CAAP) and the US Agency for International Development (USAID) through its Growth with Equity in Mindanao (GEM) Program implemented the runway project.

“Linking Tawi-Tawi to the rest of the country and the world is in line with the Philippine Government’s efforts to ensure the physical integration of Mindanao through major transport infrastructure,” said Secretary Luwalhati Antonino, chairperson of the Mindanao Development Authority, which oversees implementation of USAID’s GEM Program.

The Tawi-Tawi runway was extended by USAID from 1,608 to 1,920 meters, and widened from 18 to 30 meters. It is now all-concrete, and able to accommodate larger aircraft such as Boeing 737s and Airbus 320s.

“The A319 has a large cargo hold, which is convenient for shipping live fish to buyers in Manila, Hong Kong and other destinations, without having to repack the cargo,” said Nazrullah Masahud, vice-president of the Tawi-Tawi Chamber of Commerce and Industry.

He added that the air links would support the expansion of the mariculture industry in Tawi-Tawi, home to the Sulu Archipelago’s only multi-species hatchery.

The chamber and the provincial government worked with the airlines and the CAAP to expedite the establishment of the new flights

Previously, travelers going from Zamboanga to Tawi-Tawi had to endure a 17-hour ferry ride.

The easy access by air has drawn investors and domestic tourists to the island-province, where in recent months two small beachside hotels have opened, in addition to the expansion of existing resorts.

Redentor Lauddin, director of the Tawi-Tawi Board of Investments-Autonomous Region in Muslim Mindanao, said that Malaysian investors have expressed interest in linking Tawi-Tawi with the thriving tourism industry in nearby Sabah.

In addition to resort development, there are investment opportunities in power generation, cold storage, and housing development which are opening up in the wake of the new flight routes, said Mr. Lauddin.