Foreign biz groups wary over some power sector issues — Concepcion

Industrialist Raul T. Concepcion warned yesterday that foreign business groups are wary over certain issues affecting the power and infrastructure sectors.

Concepcion said the foreign chambers are especially concerned over three issues: unpredictable political situation; judicial intrusion on contracts approved by the Energy Regulatory Commission (ERC); reluctance by major players to participate in the bidding of power and infrastructure projects unless the process is fair and transparent.

Concepcion, chairman of the Consumer & Oil Price Watch (COPW), said he has brought these concerns to Energy Secretary Rafael Lotilla, Energy undersecretary Melinda de Ocampo, Napocor president Cyril del Callar, and Philippine Electricity Market Corp. (PEMC) president Lasse Holopainen in a meeting last Dec. 17.

The meeting was held to convey the result of Concepcion’s meeting with the six foreign chambers of commerce in the country on the need to improve the investment climate for major capital intensive industries – power and infrastructure projects like toll ways.

Concepcion said he asked the DOE officials if they were aware of EO 474 that President Arroyo signed on Nov. 30 creating a "superbody" called Philippine Strategic Oil, Gas, Energy Resources and Power Infrastructure Office (PSOGERPIO), which will be in direct conflict with the functions and duties of the DOE and its attached agencies, particularly Philippine National Oil Co. (PNOC).

Concepcion said he was informed by these officials that they have no knowledge of such an EO.

"They were not aware of EO 474 and we jointly expressed concern that this will send the wrong signals to foreign and local investors on whether the government wants to privatize the Napocor assets and channel its resources to education, and social services," the businessman said.

The consumer advocate said "now that ERC has approved the unbundling of the rates of Napocor coupled with the fact that Napocor, Power Sector Assets and Liabilities Management Corp. (PSALM) and PNOC will acquire huge revenues as most of the income tax holidays will expire in 2006, 2007, and 2008, there is an incentive not to privatize and Napocor is expected to recover all its previous losses."

He also reiterated his support for the amendment of the EPIRA. "This will require amendment of the EPIRA law to correct its defect where the winning bidder on the power plants being privatized does not have to show that they have technical competence or the financial resources and they can sell the plant as a merchant," he said.