07 December 2007
JOINT PRESS RELEASE
Freedom from Debt Coalition
National Association of Electricity Consumers for Reforms
Civil society groups went to the office of the Power Sector Assets and Liabilities Management Corporation (PSALM) today to ask that the bidding of the National Transmission Corporation (TRANSCO) on December 12 be stopped.
In a three-page letter to PSALM, the Freedom from Debt Coalition, National Association of Electricity Consumers for Reforms (NASECORE) and two homeowners associations – Federation of Village Homeowners Association (FOVA) and Federation of Las Piñas Village Association (FOLPVA) – requested the suspension of the bidding until a true due diligence has been conducted on the bidders.
The groups asserted that Two Rivers Pacific Holdings Corporation (“Two Rivers”), one of the bidders, supposedly the Filipino company partner of Italy's Terna-Rete Electtrica Nazionale S.P.A., did not meet the 60% Filipino ownership required by law from companies that will be operating public utilities such as Transco.
Article XII, Section 11 of the Philippine Constitution states that “No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens.”
The groups got hold of documents which show that Two Rivers represented by Manuel Pangilinan is also a foreign -owned company.
“The competence and integrity of PSALM may again be put in question here if it proceeds with the bidding without verifying the identities or conducting a due diligence on the bidders. This incident may also lead to further questions whether the same may be true of the other qualified bidders,” said outgoing FDC president Ana Maria R. Nemenzo.
Nasecore president Pete Ilagan explained that the Articles of Incorporation of Two Rivers shows that it has 5 Filipino incorporators/subscribers with 1 share each amounting to P100 per share. However, in item 8 of the same document, another subscriber by the name of Metro Pacific Investment Corporation (MPIC) made a capital infusion of Nine Million Nine Hundred Ninety-Nine and Five Hundred Pesos (PhP 9,999,500.00) or 99.995% of the total paid-up capital.
Further, the 2007 General Information Sheet (GIS) submitted to the Securities and Exchange Commission by Metro Pacific Investment Corp. (MPIC) disclosed that Metro Pacific Holdings, Inc. (MPHI) has an equity interest of 92.83%. However Note 20 of the 2007 Interim Report of First Pacific Company Limited (“First Pacific”), a Hong Kong-listed company, showed that this foreign company owns Metro Pacific Holdings Corporation (MPHI) 100%.
“Since Two Rivers is 99.995% owned by Metro Pacific Investment Corp (MPIC) and MPIC is 92.83% owned by Metro Pacific Holdings, Inc.(MPHI) and MPHI is a wholly-owned corporation by the foreign company First Pacific Company Limited, it follows that Two Rivers is also 92.83% owned by First Pacific Company Limited,” said Ilagan.
“The privatization of Transco is a matter of public interest. We cannot just simply turn blind and deaf to irregularities that may be happening around. If we have to go daily to PSALM to explain this matter, we will do so,” the groups said.
In a related development, Sen. Jamby Madrigal is set to file a resolution this afternoon calling for the investigation of the controversies hounding the bidding process for Transco.