MANILA, Philippines – Instead of postponing the bidding for the independent power producer administrator (IPPA) contract covering the 640-MW Unified Leyte Geothermal, the government must suspend all privatization of all remaining assets of the National Power Corporation (NPC) pending a comprehensive review of the Electric Power Industry Reform Act (EPIRA), according to the Freedom from Debt Coalition (FDC) Thursday.

The Power Sector Assets and Liabilities Management Corporation (PSALM) has recently announced that the bidding, originally slated for July 30, is postponed to give bidders more time to analyze the new terms of contract as there are “significant differences from the previous structures.”

FDC, for its part, reiterated its call for the creation of a review panel on EPIRA.

“It will be truly judicious if all scheduled asset sale of PSALM is put on hold indefinitely and a review process on EPIRA set into motion,” said Milo Tanchuling, FDC secretary-general.

Aside from the Unified Leyte geothermal, the privatization of the Angat Dam in Bulacan as well as the Agus-Pulangi hydro complexes in Mindanao are being opposed by FDC, electric cooperatives, and national and local consumer groups. They claimed that rates would certainly go up once these assets are sold to private players while communities lose control of their most valuable natural resource for energy and water.  

These groups have in fact sought the Supreme Court’s intervention in stopping the planned assets sale.  Last May 24, the Supreme Court granted FDC’s prayer to restrain PSALM from bidding out the Angat dam.  Meanwhile, the association of all electric cooperatives in regions 6, 7 and 8, on July 19, 2010 had likewise asked the High Court to issue an injunction for the July 30 auction of the unified Leyte geothermal plants.

The sale of the unified Leyte geothermal plants would have brought to 90 percent the total privatized assets of NPC, according to PSALM.   

FDC said calls for review of EPIRA have been consciously ignored by the former administration despite the glaring indicators of its evident failure in bringing down electricity rates and ensure reliability of supply.

“Not only were frauds committed in the process of privatization.  EPIRA has in fact created more problems in the industry rather than ride out the debt and power crisis that it intends to resolve during its nine years of implementation,” said Tanchuling.

Once put in place, the FDC wants the review panel to look into the following concerns:
  • Why electricity rates keep on rising?
  • Why is another power crisis looming?
  • Is PSALM’s privatization thrust consistent with EPIRA’s declared policy?
  • Why WESM is not working?
  • Why is there no de-monopilization happening in the industry?
  • Why NPC still saddled with so much debt?
  • Is the ERC keeping true to its mandate?
  • Are there other alternatives outside of the EPIRA frame?
FDC said further that the review process must involve not only industry experts but also consumers, who, for the past nine years suffered the most under this failed policy. (30)

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