The Pilipino firm selected to manage ECG, Meralco has said it has the financial muscle and technical expertise to transform the power distribution firm.
This follows concerns raised by sections of the public as well as workers and some civil society groups about their capabilities. This has led to calls for the Millennium Development Authority (MiDA) to come clear on how they
Meralco was this announced as the new owner of ECG subject to meeting government’s requirements. According to the MiDA the company has the required technical expertise to manage ECG after they carried out the necessary assessment on them.
Chief Executive of the MiDA Martin Eson-Benjamin, for instance, told JOYBUSINESS all the companies shortlisted could have been selected as the preferred winners of bid contest because of the work that they did on them.
The number of bidders reduced from 11 to six and three firms was said to be in the final “beauty” contest. The three companies were; BXC from China, EDF from France with CH group as their local partners and Meralco from the Philippines.
Who is Meralco?
According to information from its website, Meralco is the largest private sector electric distribution utility company in the Philippines covering 36 cities and 75 municipalities, including Metro Manila.
It serves 6.3 million customers in a franchise area covering 9,685 km2, that includes the core of the country’s industrial, commercial, and population centres.
It has been in operation over the past 115 years. It is also managing distribution utility in Port Harcourt and Ibadan in Nigeria.
Shareholding Structure of Meralco
According to the Company’s shareholding, structure, Beacon Electric Assets holding, a special purpose vehicle, further search on the company shows that it has no key executive recorded.
Beacon has majority has 34 percent stake in the company, making it the single largest shareholder in the company.
It’s followed by JG Summit holding one of the largest conglomerates in the Philippines with a business interest in air transportation, banking, food manufacturing, hotels and petrochemicals. JG Summit has 25.26 percent and Metro Pacific Investments with 10.50 percent.
History of Meralco
Meralco was established in 1903 as Manila Electric Railroad and Light Company to provide electric light and power and an electric street railway system to Manila and its suburbs.
The facilities that Meralco built to provide these two services represented for many years the largest single investment of American private capital and know-how in the whole of East Asia.
For a little more than four decades, Meralco provided Manileños with their first modern mass public transportation system with electric streetcars. These were supplemented by buses in the 20s.
The Philippine Government made it a state policy for the government to own all major generating facilities. Meralco sold its generating plants to the National Power Corporation, and electric distribution became its core business.
Indeed, in the first half of the 1980s, Meralco's franchise area tripled in the area from 2,678 square kilometres to 9,337 square kilometres, mainly because provincial consumers preferred the rates and service of Meralco to every other alternative.
Plan and Vision for ECG
Speaking in an exclusive interview with JOYBUSINESS Strategic Advisor to the Consortium Fred Asamany said their priority is to invest the required capital to turn around ECG.
He added that they won the bid because proposals presented to MiDA in terms of their turnaround strategy for ECG was the best. Mr Asamany also adds that in every market that they have operated, they have an actual turn around their power distribution.
According to him, they plan "to do the same thing for ECG because our main motive is not just about making a profit and impacting on areas that we operate”.