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Wednesday, May 17, 2006
AEV bares plan to add 200MW to Veco supply
By Jessica B. Natad
Sun.Star Staff Reporter
Cebuano company Aboitiz Equity Ventures (AEV) revealed it will buy additional 200 megawatts of power from a new capacity power plant.
AEV president and chief executive officer Jon Ramon Aboitiz told a press conference held at the Cebu City Marriott yesterday that the acquisition will give the Visayan Electric Co. (Veco) additional 200 megawatts by 2010.
He said AEV has scheduled a bidding for the additional power requirement on June 14 while the awarding of the project is on June 26.
Confirm
The Korean Electric Philippines Co. (Kepco) and Mirant Philippines have confirmed participation in the bidding, he added.
“But the power must be new capacity. We don’t need old power plants. What we need is new capacity for power,” Aboitiz stressed.
Kepco, in partnership with Salcon Power, is building two 100-megawatt coal-fired power plants in the southern Cebu town of Naga. Mirant, on the other hand, has an existing coal-fired power plant in Toledo City.
“If they (Mirant) wins the bidding, the power they will supply us must come from a new power plant,” Aboitiz said.
“At the end of the day, we are looking at the price (bidders will offer us). It must be lower than the price of power we are getting from Napocor (National Power Corp.),” he added.
He said Cebu needs additional power supply as soon as possible, otherwise another province-wide blackout, like the one Cebu experienced last week, would not be a remote possibility.
Big share
He said the 200 megawatts will be purchased on a staggered basis—at 50 megawatts, per tranche.
AEV’s power group, which includes the distribution utility firm Veco and hydroelectric plants in different areas in the country, accounted for 61 percent or P2.12 billion of the company’s income, AEV chief operating officer Erramon Aboitiz reported during the firm’s stockholders’ meeting last Monday.
He said AEV’s P3.16 billion profit last year was a 29 percent increase of its restated earnings in 2004.
The banking group, composed of Union Bank of the Philippines and City Savings Bank, was the next biggest contributor to AEV’s 2005 income, accounting for 27 percent or P930 million.
While the company’s power and banking group contributed much to the company’s income, AEV’s transport group, the Aboitiz Transport System, contributed only one percent or P34 million of total profits.
“Higher fuel costs squeezed ATS’ margins, while stiff competition did not allow the company to recover all increases in its costs,” Erramon said.
Despite this performance, AEV will continue to invest in ATS, as well as its other core businesses, he said.
For Bisaya stories from Cebu. Click here. (May 17, 2006 issue)
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