02 October 2008
- Intensifying its opposition to the privatization of the National Transmission Corporation (Transco), the Freedom from Debt Coalition today demanded a full disclosure of the nature and content of the concession contract between the Power Sector Assets and Liabilities Management Corporation (PSALM) and the winning consortium that will take over the operation of the national grid for 25 - 50 years.
FDC, however, said the full content of the concession contract remains classified to the public and possibly also to lawmakers (especially in the House of Representatives) who stealthily passed the bill granting a national franchise to NGPC without perhaps doing a full scrutiny of the concession contract.
“Nangangapa tayo ngayon dito sa dilim.
Is the Transco sale priced correctly? Who were the people behind this lucky consortium? Who is going to shoulder Transco’s liabilities? How fast is the consortium allowed to recover their investments? Will electricity rates go down after the privatization of Transco? Is the national security not jeopardized by allowing aliens to become our system operator? Is the consortium allowed to do another business that is not related to transmission such as telecom using Transco’s system? What will happen to Transco workers? These are some of the burning questions that still need to be answered,” the advocacy group said in a statement.
In a controversial auction held in December 2007, PSALM awarded the contract to a consortium led by the State Grid Corp. of China, Monte Oro Grid Resources Corporation (MOGRC) and Calaca High Power for a bid price of $3.95 billion. The consortium was later named the National Grid Power Corporation (NGPC).
Now that plenary debates on the franchise bill shifts to the Senate, the group is asking the senators, specifically the members of the Joint Congressional Power Commission (JCPC), for transparency on the full details of the concession contract.
“Let the content of the contract be fully disclosed to the public. Let there be a public debate on this,” said the FDC, urging the Senate to scrutinize the contract in the same passion and intensity it has done on controversial issues in the past.
The group said that based on recent experiences, concession contracts – as one of the many forms of privatization – were always tainted with fraud and anomalies such as “hidden costs” and sovereign guarantees that transfer private risks to the public, as in the cases of contracts with independent power producers (IPPs), and concession contracts between the Metropolitan Waterworks and Sewerage System (MWSS) and its two concessionaires.
Describing Transco as the people’s “last line of defense” against the onslaught of privatization of the power industry, FDC reiterated its position that being a natural monopoly and serving as the main backbone of the whole power industry, the transmission grid is very much imbued with public interest and therefore must remain ‘public’ where the state exercises absolute control over it.
The coalition also maintained that being a very lucrative and strategic business, with Transco being the nation’s ‘crown jewel’ (with annual net income of not less than P15B), it was not public service but greed, handsome profit and control in the whole industry, which motivate the private monopoly in acquiring this business.
The group also argued that while Congress is still in the process of reviewing and amending the Electric Power Reform Act or EPIRA, withholding the grant of a franchise to NGPC is an option worth to consider. For the past seven years, the FDC said, EPIRA failed to meet its objective of lowering the cost of power in the country and bring competition and efficiency in the industry. EPIRA merely transferred the monopoly power from the state to private corporations. -30-