07 July 2006
Anti-power privatization group Freedom from Debt Coalition today condemned and sought the immediate removal from office of government executives for still giving YNN Pacific Consortium the chance to acquire the efficient and profitable 600-MW Masinloc plant despite the Corporation’s repeated failure to deliver its $227.54-million upfront payment for the plant.
“We want the immediate removal of government officials involved in Masinloc privatization deal. It is very obvious that the government still wants to save YNN Pacific in this privatization deal despite obvious financial incapability of the corporation to acquire Masinloc,” said FDC Secretary General Milo Tanchuling.
Yesterday, Department of Finance Secretary Margarito Teves, also Chairman of the Board of Power Sector Assets and Liabilities Management Corporation (PSALM), said the government is open to giving YNN until July 31 to give its down payment. He retracted later his statement, saying the government will issue termination notice for Masinloc contract on or before 10 July.
“This means that the government only forfeited YNN Pacific’s performance bond, but did not terminate the contract. The government, in essence, is giving more time for YNN Pacific to fulfill its commitment in complying with the submission of upfront payment as another 30 days, beginning with the issuance of such termination notice,” Tanchuling stressed.
FDC likewise denounced the government’s role in negotiating a power supply deal between YNN Pacific and Meralco.
“What is more condemnable is that even before the termination takes effect, the government is also acting as the negotiator of YNN Pacific to enter into a power supply deal with Meralco for Masinloc’s power,” said Tanchuling, adding that such act is “a clear betrayal of public trust.”
Tanchuling explained that there was no power supply contract with a distribution utility attached to the sale of Masinloc before and until the time of the bidding. But after the bid was won and YNN could not get investors’ support in the deal, the government through PSALM which bid the plant out has been negotiating with Meralco to seal a power supply deal for Masinloc’s power.
The Meralco-Masinloc power deal is reportedly a condition of Malaysian company Ranhill Berhad for it to buy-in YNN Pacific before it delivers the initial payment for Masinloc plant.
“Worse, not only PSALM is involved in this obvious conspiracy, but also the Department of Energy, DoF, and Malacañang,” said Tanchuling, adding that DoE Secretary Rafael Lotilla himself blamed the breakdown of negotiations for a power supply deal with Meralco for Masinloc’s power for the failure of Masinloc’s privatization.
“Those cabinet officials involved in Masinloc sale are alter egos of the President. Therefore, Mrs. Gloria Arroyo is knowledgeable of the deals. In effect, she is tolerating this insidious deal against the people,” Tanchuling said.
“Everybody now knows that on the day of the deadline, Presidential chief of staff Mike Defensor said that the Office of the President is studying a possible extension of the deadline on the Masinloc buyer after it received a request from Malaysian Prime Minister Dato’ Seri Abdullah Ahmad Badawi for the extension in behalf of Ranhill. Why is the President protecting the interest of foreign investors, instead of that of the Filipino people?” asked Tanchuling.
FDC said that should the Meralco-YNN deal becomes successful, higher power rates are in the offing as YNN will recover through the contract its $561-million bid of Masinloc including the 12 percent interest it will have to pay for the balance after the $227-million initial payment is made and the $14-million performance bond that was forfeited. ###