A consortium including State Grid Corp of China is expected to win the right to operate the Philippines' national power transmission grid for a 25-year concession after posting a winning bid of US$3.95 billion.

State Grid said it acts as the technical partner and 40-percent equity shareholder in the group, which also includes Philippines partners Monte Oro Grid Resources Corp and Calaca High Power Corp.

The deal would be the biggest privatization in the Southeast Asian nation's history.

Still, the consortium has to get a franchise to operate the grid from the Philippines Congress within one year otherwise the right will revert to the government. The Philippines government has been trying to privatize TransCo to modernize the power industry.

The latest auction yesterday was the fifth after previous attempts proved fruitless due to political uncertainty and concern on low investment return. But a new tariff system put in place since last year is supposed to make the 25-year license more attractive to investors.

The winning bid narrowly beat the US$3.905 billion offer of the sole rival bidder, a consortium led by San Miguel Energy Corp, a unit of the Philippines' largest food and beverage company, according to Power Sector Assets and Liabilities Management Corp, which conducted the auction.

(Shanghai Daily December 14, 2007)