BACOLOD CITY – The National Electrification Administration (NEA) has granted conditional consent to the joint venture agreement (JVA) between the Central Negros Electric Cooperative (Ceneco) here and Primelectric Holdings Inc. /Negros Electric Power Corp. (NEPC).
“The word condition refers to the items NEA wants to be done in the granting of the consent,” lawyer Arnel Lapore, acting Ceneco general manager, said in an interview on Tuesday.
Under the JVA, the private entity will infuse capital and financial resources to modernize and improve power distribution in Ceneco’s franchise area through the joint venture company called the NEPC.
Lapore cited the memorandum dated Nov. 13 issued by Administrator Antonio Mariano Almeda to Ceneco, copies of which were provided to the local media Monday night, stating that NEA “conditionally grants its consent to the JVA subject to the fulfillment of (nine) conditions.”
Two of these include the settlement by Ceneco of all its outstanding loans and obligations with NEA and other creditors, who hold liens on its properties and submit proof of settlement of such obligations.
Lapore said that currently, Ceneco owes NEA about PHP60 million, comprising accumulated loans extended for the implementation of the power utility’s projects over the years, while its outstanding loans with creditor banks have reached about PHP200 million.
In the memorandum, Ceneco has to pay the separation pay and retirement benefits under applicable laws and collective bargaining agreements that will be due to its employees and must ensure that it has set aside adequate funds for the bill and meter deposits of its member-consumer-owners (MCOs).
Another condition is that the assets of Ceneco funded or sourced from grants, subsidies, or other assistance from NEA shall not form part of the assets it will sell to Primelectric/NEPC.
NEA also directed Ceneco to submit its nominated representatives to the NEPC board and the grant of a valid and effective legislative franchise to NEPC for the current franchise area of Ceneco.
The NEA further said that Primelectric/NEPC must fulfill the mandate and fund the full electrification of the franchise area of Ceneco.
Lastly, Ceneco must submit a full accounting of the settlement of its obligations and the net cash amount it shall have after the implementation of the JVA, including all of its outstanding loans and obligations with NEA and all other creditors, as well as the value of the assets funded or sourced from grants, subsidies or other assistance from NEA.
“Ceneco is directed to preserve such net cash and shall only utilize the same with the approval of the NEA,” it added.
In the memorandum, Almeda also directed Ceneco to ensure the provision of services to its MCOs up to the full implementation of the JVA and the start of operations of NEPC.
“There should be no disruption in services during the transition of operations,” the NEA chief said.
Ceneco’s coverage area includes the cities of Bacolod, Bago, Silay, and Talisay and the towns of Don Salvador Benedicto and Murcia. (PNA)