Power Sector Assets And Liabilities Management

Section 49. Creation of Power Sector Assets and Liabilities Management Corporation or PSALM

This is a government-owned and -controlled corporation which shall own all existing NAPOCOR generation assets, liabilities, IPP contracts, real estate and all other disposable assets.

All outstanding obligations of the NAPOCOR arising from loans, issuances of bonds, securities and other instruments of indebtedness shall be transferred to and assumed by the PSALM Corp. within one hundred eighty (180) days from the approval of this Act.

Section 50. Purpose and Objective, Domicile and Term of Existence

The principal purpose of the PSALM Corp. is to manage the orderly sale, disposition, and privatization of NAPOCOR generation assets, real estate and other disposable assets, and IPP contracts with the objective of liquidating all NAPOCOR financial obligations and stranded contract costs in an optimal manner.

The PSALM Corp. shall have its principal office and place of business within Metro Manila.

The PSALM Corp. shall exist for a period of twenty five (25) years from the effectivity of this Act, unless otherwise provided by law, and all assets held by it, all moneys and properties belonging to it, and all its liabilities outstanding upon the expiration of its term of existence shall revert to and be assumed by the National Government.

Section 51. Powers

The Corporation shall:

• ^a formulate and implement a program for the sale and privatization of the NAPOCOR assets and IPP contracts and the liquidation of NAPOCOR debts and stranded contract costs, such liquidation to be completed within the term of existence of the PSALM
• ^b take title to and possession of, administer and conserve the assets transferred to it; to sell or dispose of the same at such price and under such terms and conditions as it may deem necessary or proper, subject to applicable laws, rules and regulations
• ^c take title to and possession of the NAPOCOR IPP contracts and to appoint, after public bidding in transparent and open manner, qualified independent entities who shall act as the IPP Administrators in accordance with this Act
• ^d calculate the amount of the stranded debts and stranded contract costs of NAPOCOR which shall form the basis for ERC in the determination of the universal charge
• ^e liquidate the NAPOCOR stranded contract costs utilizing proceeds from sales and other property contributed to it, including the proceeds from the universal charge
• ^f adopt rules and regulations as may be necessary or proper for the orderly conduct of its business or operations
• ^g sue and be sued in its name
• ^h appoint or hire, transfer, remove and fix the compensation of its personnel: Provided, however, That the Corporation shall hire its own personnel only if absolutely necessary, and as far as practicable, shall avail itself of the services of personnel detailed from other government agencies
• ⁱ own, hold, acquire, or lease real and personal properties as may be necessary or required in the discharge of its functions
• ^j borrow money and incur such liabilities, including the issuance of bonds, securities or other evidences of indebtedness utilizing its assets as collateral and/or through the guarantees of the National Government: Provided, however, That all such debts or borrowings shall have been paid off before the end of its corporate life (k) To restructure existing loans of NAPOCOR; (l) To collect, administer, and apply NAPOCOR’s portion of the universal charge; and (m) To restructure the sale, privatization or disposition of NAPOCOR assets and IPP contracts and/or their energy output based on such terms and conditions which shall optimize the value and sale prices of said assets.

Section 52. Power Sector Assets and Liabilities Management Corporation, Meetings, Quorum and Voting

The Corporation shall be administered, and its powers and functions exercised, by a Board of Directors which shall be composed of the Secretary of Finance as the Chairman, the Secretary of Budget and Management, the Secretary of the Department of Energy, the Director-General of the National Economic and Development Authority, the Secretary of the Department of Justice, the Secretary of the Department of Trade and Industry and the President of the PSALM Corp. as ex officio members thereof.

The Board of Directors shall meet regularly and as frequently as may be necessary to enable it to discharge its functions and responsibilities. The presence at a meeting of four (4) members shall constitute a quorum, and the decision of the majority of three (3) members present at a meeting where there is quorum shall be the decision of the Board of Directors.

Section 53. Powers of the President of PSALM Corp

The President of PSALM Corp. shall be appointed by the President.

In the absence of the Chairman, the President shall preside over Board meetings.

The PSALM Corp. President shall be the Chief Executive Officer of PSALM Corp. and shall have the following powers and duties:

(a) To execute and administer the policies and measures approved by the Board, and take responsibility for the efficient discharge of management functions; (b) To oversee the preparation of the budget of PSALM Corp.; (c) To direct and supervise the operation and internal administration of PSALM Corp. and, for this purpose, may delegate some or any of his administrative responsibilities and duties to other officers of PSALM Corp; (d) Subject to the guidelines and policies set up by the Board, to appoint and fix the number and compensation of subordinate officials and employees of PSALM Corp; and for cause, to remove, suspend, or otherwise discipline any subordinate employee of PSALM Corp; (e) To submit an annual report to the Board on the activities and achievements of PSALM Corp. at the close of each fiscal year and upon approval thereof, submit a copy to the President of the Philippines and to such other agencies as may be required by law; (f) To represent PSALM Corp. in all dealings and transactions with other offices, agencies, and instrumentalities of the Government and with all persons and other entities, private or public, domestic or foreign; and (g) To exercise such other powers and duties as may be vested in him by the Board from time to time.SEC. 54. Exemption from the Salary Standardization Law. – The salaries and benefits of employees in the PSALM Corp. shall be exempt from Republic Act No. 6758 and shall be fixed by the PSALM Corp. Board. SEC. 55. Property of the PSALM Corp. – The following funds, assets, contributions and other property shall constitute the property of the PSALM Corp.: (a) The generation assets, real estate, IPP contracts, other disposable assets of NAPOCOR, proceeds from the sale or disposition of such assets and the residual assets from B-O-T, R-O-T, and other variations thereof; (b) Transfers from the National Government; (c) Proceeds from loans incurred to restructure or refinance NAPOCOR’s transferred liabilities: Provided, however, That all borrowings shall be fully paid for by the end of the life of the PSALM Corp.; (d) Proceeds from the universal charge allocated for stranded contract costs and the stranded debts of NAPOCOR; (e) Net profit of NAPOCOR; (f) Net profit of TRANSCO; (g) Official assistance, grants, and donations from external sources; and (h) Other sources of funds as may be determined by PSALM Corp. necessary for the above- mentioned purposes.

Section 56. Claims Against the PSALM Corp

The following shall constitute the claims against the PSALM:

(a) NAPOCOR liabilities transferred to the PSALM Corp.; (b) Transfers from the national government; (c) New loans; and (d) NAPOCOR stranded contract costs.