COA to audit sale of Napocor assets

MANILA, Philippines - The Commission on Audit (COA) will scrutinize the sale of power plants and other assets of the National Power Corp. (Napocor) to determine primarily where billions of dollars in privatization proceeds were used.

COA officials made this promise in response to a letter sent by Representatives Ben Evardone of Eastern Samar, Alfredo Benitez of Negros Occidental, Joseph Victor Ejercito of San Juan, and Lord Allan Jay Velasco of Marinduque.

The four congressmen called attention to the fact that despite the sale of most Napocor assets, the Power Sector Assets and Liabilities Management Corp. (PSALM), the state entity tasked to do the sale, has settled only a small portion of Napocor’s debt.

What is worse is that PSALM itself is now mired in indebtedness, they said.

“In 2001, Napocor debt was about $12 billion. Last year, PSALM claimed that the Napocor debt jumped to $15 billion. During last week’s budget hearing, PSALM claimed its debt increased to $17 billion. The increase is surprising as PSALM has already privatized 98 percent of Napocor assets,” they said.

They said they have information that some Napocor plants were privatized “on a fire sale.”

They added that PSALM is now trying to pass on to consumers the billions in loans it has obtained and millions of questionable expenses it has incurred, including payments to consultants and bonuses and other emoluments paid to the agency’s personnel.

During last week’s hearing, Energy Secretary Jose Rene Almendras said PSALM has petitions for a power rate increase pending with the Energy Regulatory Commission.

He said the agency is seeking an increase of 39 centavos per kilowatt-hour (kwh), “which we are trying to bring down to nine centavos by extending the recovery period.”

He also admitted that residential power rates in the Philippines are now the highest in Asia, beating those in Singapore and Japan.

Aside from PSALM, another power agency, the Renewable Energy Board, is seeking another power rate increase equivalent to 12 centavos per kwh.

The 12 centavos will go to a fund that would be used to reimburse investors in renewable energy of their investments, plus an annual margin of up to 18.5 percent.