By Kris Crismundo/PNA
MANILA — AboitizPower dodged a bullet by its non-participation in the power supply bidding for Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), which is now faced with financial ruin.
AboitizPower Chief Operating Officer Emmanuel Rubio told reporters Tuesday that its Retail Electricity Supply (RES) unit Advent Energy, Inc. did not renew its contract with Hanjin since it did not participate in the bidding in September 2018.
Rubio said Advent and Hanjin have a one-year transition contract that started in February 2018, as Hanjin opted for it to supply its power needs rather than getting electricity from Subic EnerZone.
Subic EnerZone is also a unit of AboitizPower that operates the distribution system at the Subic Bay Freeport Zone where Hanjin shipyard is operating.
From 2008, Hanjin subscribed to Subic EnerZone for its power demand before transferring to RES to save electricity cost.
Its power demand from Subic EnerZone went from a low of 4 megawatts to a high of 65 MW.
When it transferred its power demand to Advent, Hanjin demanded for a high of 55MW from the AboitizPower RES unit.
Rubio noted that the transition contract is set to expire next month.
With the expiration of the contract in February, AboitizPower will no longer be connected with Hanjin, at this time that the South Korean shipbuilder revealed that it is in a serious debt problem with USD1.3 billion outstanding loans — USD400 million from Philippine banks and USD900 million from South Korean lenders.
Rubio added Hanjin no longer has payment obligations with Advent.
“We didn’t actually bid. We didn’t make an offer,” the AboitizPower executive said.
“They are looking for a very competitive price, which we feel that it’s too low for us,” he said, explaining why AboitizPower did not participate in the bidding.
He added that they left the bidding to other big players in the industry.
Rubio also noted that even before this announcement from HHIC-Phil, AboitizPower was already closely following developments with Hanjin.
He added that the power demand from Hanjin’s operation in Subic was declining, which was a dead giveaway that its operation was slowing down.
