Holiday delays turnover of Transco's operations

CEBU - The holidays have delayed the turnover of the National Transmission Corporation’s operation to the National Grid Corporation of the Philippines.

Maricris Cabaljin, head of NGCP corporate communications department told The FREEMAN yesterday that the turnover was deferred because yesterday was a non-working day.

“But definitely the turnover will happen on January 5 next year,” Cabaljin said.

   It maybe recalled that President Gloria Macapagal-Arroyo signed into law republic Act 9511 last December 1 allowing the consortium to operate Transco for 50 years.

According to the Power Sector Assets and Liabilities Management Corp. (PSALM), the body that oversees the sale of energy assets under the Electric Power Industry Reform Act, NGCP will pour in fresh capital and technology to improve and maintain the system.

NGCP is made up of Monte Oro Grid Resources Corp. (MOGRC), Calaca High Power Corp. and State Grid Corp. of China.

   MOGRC is 100% owned by Monte Oro Resources and Energy, Inc.

Cabaljin said that under the contract, NGCP will initially pay 25 percent of the $3.95 billion after NGCP won last year’s bidding to operate the system for such amount.

She added that the remaining balance will be payable by NGCP to the government in 25 years.

   “This franchise shall be for a term of fifty (50) years from the date of the effectivity of this act and is hereby granted under the condition that it shall be subject to amendment, alteration or repeal by Congress when the common good so requires,” the law said.

   R.A. 9511 provides some of the responsibilities of NGCP which includes the right to operate the grid based on industry standards, the right of eminent domain, which is necessary to construct, expand and maintain the system, a prohibition to sell, lease, or transfer the franchise to any person or firm and to pay a franchise tax of 3% of gross receipts from operations among others.

   Questions were earlier raised about the bidding as Monte Oro is closely identified with businessman Enrique S. Razon, Jr., who is said to be close to the first family.

The Freedom from Debt Coalition in a statement said that Transco is the nation’s “last line of defense” in the power industry against the onslaught of privatization.

   “Transmission is a natural monopoly, whoever gets hold of it is bestowed with monopoly power. And monopoly in business means not only economic power but also political power,” said FDC in a statement.

FDC said that the ownership, control and management of the transmission lines should remain in public hands as this is the consumer’s last line of defense against the onslaught of privatization as the government continues to work for a genuine power reform law that can provide us with an affordable, clean, sustainable and renewable energy. — Mitchelle L. Palaubsanon/NLQ   (THE FREEMAN)