Subic Bay Power Distribution

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Aboitiz Equity Ventures was awarded Subic Bay Power Distribution concession for a period of 25 years by the Energy Regulatory Commission (ERC) in October 2003. The Power Distribution Agreement (PDA) which was a a Rehabilitate-Operate-Transfer (ROT) arrangement had been signed with Subic Bay Metropolitan Authority (SBMA) in May 2003. The PDA covered the Subic Bay Freeport Secured Area. It served the Central Business District, the Gateway area, the Subic Port District, Cubi-Triboa area, Kalayaan and Binictican housing area and the West Ilanin forest. From 1997 to 2001, the total electricity demand at the SBMA grew at an annual average growth rate of 3.33%. The system peak demand grew from 23.9 MW in 1997 to 32.8MW in 2002. Aboitiz was to pay annual fee of p40 million (US$761,000) to the government and to invest some P368 million (US$7 million) to rehabilitate the facility before transferring it back to SBMA. The power cost of P3.9 was cheaper than the industrial charges in Manila at P6.02 Kw/h. The terms of reference of the agreement required bidders to offer rates below the rates of the SBMA which was P4.49 Kw/h. None None