Government urged to suspend biddings for Napocor assets, contracts

MANILA, Philippines - A cause-oriented group has urged government to suspend all biddings on National Power Corp. (Napocor) assets while a comprehensive review of all contracts and the power reform law is being undertaken by the Department of Energy (DOE).

The Freedom from Debt Coalition (FDC) said “the government must suspend all privatization of all remaining assets of the Napocor pending a comprehensive review of the Electric Power Industry Reform Act (EPIRA).”

The Power Sector Assets and Liabilities Management Corp. (PSALM) recently postponed the bidding for the independent power producer administrator (IPPA) contract for the 640-megawatt Unified Leyte geothermal plants, originally slated for July 30, to give bidders more time to analyze the new terms of contract as there are “significant differences from the previous structures.”

With this, FDC reiterated its call for the creation of a review panel on EPIRA.

“It will be truly judicious if all scheduled asset sale of PSALM is put on hold indefinitely and a review process on EPIRA set into motion,” FDC secretary-general Milo Tanchuling said. 

Aside from the Unified Leyte facilities, the privatization of the Angat Dam in Bulacan as well as the Agus-Pulangi hydro complexes in Mindanao are being opposed by FDC, electric cooperatives, and national and local consumer groups. They claimed that rates would certainly go up once these assets are sold to private players while communities lose control of their most valuable natural resource for energy and water.  

These groups have, in fact, sought the Supreme Court’s intervention in stopping the planned asset sale.  Last May 24, the Supreme Court PSALM from bidding out the Angat dam.  Meanwhile, the association of all electric cooperatives in Regions 6, 7 and 8 had likewise asked the High Court to issue an injunction for the July 30 auction of the Unified Leyte geothermal plants.

The sale of the Unified Leyte geothermal plants would have brought to 90 percent the total privatized assets of Napocor, according to PSALM.   

FDC said calls for review of EPIRA have been consciously ignored by the previous administration despite the glaring indicators of its evident failure in bringing down electricity rates and ensuring reliability of supply.

“Not only were frauds committed in the process of privatization.  EPIRA has, in fact, created more problems in the industry rather than ride out the debt and power crisis that it intends to resolve during its nine years of implementation,” Tanchuling said.