Napocor plans better procurement process

To make it more responsive to changing market conditions, the state-owned National Power Corp. (Napocor) is planning to improve its procurement procedures, the company’s top executive said.

Napocor president Cyril C. Del Callar said they recognize the need to enhance their existing procurement policies and procedures.

“Based on our recently-held corporate review of procurement policies and procedures, we will now formulate adjustments and refinements to make them more customer-focused,” he said.

Del Callar said among the changes being considered are in the areas of fuel management, supplies and logistics. He also said it is important to streamline and shorten Napocor’s bidding process without foregoing transparency and strict compliance with government procurement rules.

“A good, realistic balance is needed to realize economical, efficient and competitive purchase of fuel supplies for Napocor,” he said.

But he said the changes would still be compliant with existing government procurement rules.

“Of course, the adjustments and improvement will be based and shall consider the provisions of RA 9184 and other relevant laws and regulations,” Del Callar said.

According to the Napocor chief, the company conducts these reviews regularly, in all aspects of its operations, especially those considered critical, to ensure sufficient supply of electricity to its customers, and more stable prices for its power generation.

“With strict compliance to procurement laws and regulations, as well as government audit procedures, Napocor, through continuous refinements in its systems and processes, ensure that they are responsive to current market realities if the corporation is to deliver on its critical role as the country’s primary power generator,” Del Callar said.

The Napocor executive said these reviews and adjustments are imperative so that company can continue to contribute to further push economic growth and progress that the country is now enjoying under the administration of President Arroyo.

“We will continue to undertake this comprehensive review of our current procurement policies and fuel management systems to assure that our generation facilities have more than sufficient fuel supply, at the same time enable us to source fuel economically, efficiently, and competitively,” Del Callar said.

Specifically, he cited the need to reconsider the validity of its budget-setting formula, especially in the determination of procurement price limits or “approved buying price,” stock or inventory level policies, and the mandatory rebidding requirements.

Comparatively, privately-owned power generators have longer term fuel contracts which are very good in a period of rising prices.

But he said there are also long stretches of time that their contracted price is higher than current prices.

“These disparities translate to billions of pesos that can be saved if properly done. We have to strike a balance that works for Napocor as a government-owned and controlled corporation, as it provides the national economy with the momentum for growth,” Callar said.

This initiative, Del Callar said, will involve representatives from the Departments of Energy, Finance, Budget, Commission on Audit and the Government Procurement Board.