"The logical act of President Gloria Macapagal-Arroyo is to veto the mega-franchise bill since approving it would require Meralco to make more investments in its areas of operation," Nasecore president Pete Ilagan said.
Ilagan made this call amidst Meralco’s claim that it would be in the red as a result of the recent Supreme Court decision ordering it to refund to its customers more than P28 billion in overcharges.
About 16 of Meralco’s franchises are due to expire this year. These franchises cover Caloocan, Las Piñas, Makati, Malabon, Mandaluyong, Navotas, Parañaque, Pasay, Quezon City, San Juan and Manila.
"With the pronouncement of a Meralco official that the refund would put it in jeopardy in defaulting on debt payments, it is crystal clear that it does not have funds to make the required investments," Ilagan said.
Ilagan cited recent reports from Standard and Poor’s saying that Meralco has total outstanding debt of about P70.2 billion at the end of 2002, about P9 billion in short-term debt maturing over the next 12 months and another P5 billion in long-term debt.
Nasecore proposed two options for the expired Meralco franchises. First, to allow the existing electric cooperatives distribution utilities to bid for the expired franchises; and second, to encourage the organization on the consumers into a supplier-cooperative that can partner with existing distributors or prospective players (foreign or local) in the distribution sector.
According to Ilagan, Nasecore has submitted a concept paper to Malacañang last week where it requested the President to veto the Meralco mega franchise bill.
In the concept paper, Nasecore asked the President to return the bill to Congress and direct legislators to formulate implementing rules and regulations for bidding expired franchises and formulate incentives for prospective bidders.
The consumer group also bewailed the false reports that the President cannot veto the mega-franchise bill of Meralco since the President has veto powers only on revenue and tariff bills.
"Section 27 of Article VI of the 1987 Constitution provides that every bill passed by Congress shall, before it becomes a law, be presented to the President. If she approves the same, she shall sign it; otherwise, she shall veto it and return it to Congress with her objections," Ilagan said.