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|February 10th, 2009, 02:57 AM||#10|
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San Miguel eyes $1-billion water project
By Zinnia B. Dela Peña Updated February 10, 2009 12:00 AM
MANILA, Philippines - San Miguel Corp., Southeast Asia’s largest food and drink group, is diversifying further in the utilities sector as it eyes a $1-billion project in the water distribution business.
In a disclosure to the Philippine Stock Exchange, San Miguel said its wholly-owned unit San Miguel Bulk Water Co. Inc. (SMBWCI) submitted to the Metropolitan Waterworks & Sewerage System (MWSS) an unsolicited proposal for the joint development of the Laiban Dam project located in Tanay, Rizal.
San Miguel said Laiban Dam project is “intended to address the long-term water requirements of Metro Manila and to provide stability and security to the water supply source.”
San Miguel said SMBWCI plans to enter into a cooperative joint venture with MWSS to secure financing and undertake the engineering and design, construction, operation and maintenance of the project.
Plans for the project include the construction of the dam and headworks, raw water conveyance facilities, water treatment plant, hydropower plant, treated water conveyance facilities, pumping stations, storage facilities and offtake points.
The dam reportedly has the potential to supply 1,900 million liters a day of water to consumers in the metropolis, who consume an average of 500 million liters daily.
The construction of the Laiban Dam is also expected to contribute to the Luzon power grid and alleviate the recurring energy crisis in Luzon since it could generate 153 megawatts.
Earlier studies showed that the quality of fresh water resources in the country is steadily declining and is being compounded by water scarcity.
San Miguel said the proposal is in line with its thrust to invest in strategic industries such as power, oil and gas, and water.
The conglomerate has been aggressively venturing out of its core food and beverage business following a string of asset disposals.
In December last year, San Miguel acquired the Government Service Insurance System’s 27-percent stake in power utility giant Manila Electric Co. for around P30 billion and has agreed to buy up to 50.1 percent of giant oil refiner Petron Corp. for P32.2 billion.
San Miguel is also planning to invade the telecommunications sector through a joint venture with Qatar Telecom.
San Miguel, through unit San Miguel Energy Corp. is expanding its investments in the power sector by joining biddings for government-owned assets.
San Miguel Energy has submitted to the Power Sector Assets and Liabilities Management Corp. a letter of intent to acquire the 620-megawatt combined-cycle power plant facilities in Limay, Bataan.
It is also looking at bidding for PNOC-Exploration Corp. (PNOC-EC), the oil and gas subsidiary of state-owned Philippine National Oil, and three other major geothermal assets.
PNOC-EC has interests in nine service contracts, including a 10-percent stake in the $4.5-billion Malampaya deep water gas-to-power project off Palawan Island.
The government estimates that at least 4,000 megawatts more generating capacity is needed until 2014 and has warned that existing supply in the main island of Luzon will fall short of peak demand by 2010.
San Miguel, founded as a brewery in 1890, has dominated the Philippine market for beer, dairy, processed food, grains and poultry. Faced with a maturing domestic beer market, it went on a buying spree in Asia during the past several years, spending around $2 billion, in line with efforts to boost profitability.
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