Primelectric Holdings Inc. (PHI) has assured Bacolod Mayor Alfredo Abelardo Benitez that it is committed to invest whatever it takes to “expand and modernize the distribution system” in the Central Negros Electric Cooperative (CENECO) franchise area.
The PHI-CENECO joint venture firm will be known as the Negros Electric and Power Corp. (NEPC).
However, the joint venture agreement (JVA) needs the approval of CENECO consumer-members through a plebiscite for it to push through. The National Electrification Administration has put the plebiscite on hold pending the cleansing of the CENECO voters list.
PHI and NEPC president Roel Z. Castro, in his letter dated July 10 in response to Benitez queries, said “some people interpret the fact that there is no specific mention of P2 billion in the JVA to mean that there is no P2 billion commitment. They are mistaken.”
PHI is committed “to invest the needed capital and financial resources and provide its technical expertise and experience required to expand and modernize the distribution system”, he said.
There is no mention of its P2 billion commitment in the JVA because the investment requirement may be more than that, he explained.
“Our initial analysis of the situation in the franchise area led us to prepare an investment of P2 billion over a period of 5 years from our takeover of the distribution responsibility,” he added.
Castro also said they are firmly committed to provide stable power in the franchise area within two years from takeover of operations, and to upgrading CENECO’s facilities.
They will be charging Value Added Tax (VAT) as this is required by the Bureau of Internal Revenue, Castro said.
CENECO is also required to pay VAT for its generation, transmission and distribution charges, he pointed out.
PHI will hold 70 percent interest in the joint venture firm, Castro reiterated.*