Joker questions Camacho on proposed sale of Meralco shares

Sen. Joker Arroyo lashed yesterday at Finance Secretary Jose Isidro Camacho for proposing the sale of government shares in Meralco even at a loss, while the Senate has yet to finish hearing the legislative franchise of the public utility company.

"Why doesn’t he wait until the Senate approves the franchise, if ever, so that the government could have a bigger price for its shares?’ asked Arroyo, chairman of the Senate committee on public services.

Arroyo said he could not understand why Camacho’s statement coincided with the Senate hearing on the Meralco franchise.

The senator also said that in the event of a sale, the members of the government financing institutions like the Social Security System (SSS) and the Government Service Insurance System (GSIS) would shoulder the losses, not just the government.

"The SSS and the GSIS invested in Meralco in the hope of making money. Now, Secretary of Borrowing, not of finance, Camacho declared that the government should sell the shares even at a loss because the government needs money!" Arroyo complained.

He said that the value of the shares would naturally go up the moment the franchise is approved.

"But Secretary Camacho could not wait!" Arroyo said.

The government, through various agencies, holds 24 percent of Meralco shares and has three representatives in the board. Former Sen. Juan Ponce Enrile earlier questioned the return of Meralco control to the Lopez family, saying the government during the Marcos regime had legally acquired the firm.

Arroyo said that the determination of the actual membership of Meralco is vital in the committee’s appraisal of the Meralco franchise bill. He added, however, that he would not call Enrile to the committee hearing.

During yesterday’s public hearing on the Meralco franchise, Arroyo also wanted to know how the three government representatives to the Meralco board, Margarito Teves, Carlos Dominguez Jr., and Octavio Espiritu, voted on issues favorable to Meralco but against consumers.

"When Meralco petitioned for increase in rates or in the purchased power adjustment, did the government representatives side with Meralco because this would mean more money for the government or the government financing institution? Or, did they protect the general interest of the people?" he asked.

He also expressed exasperation that there seemed to be no communication between the energy department and the three government representatives to Meralco on key issues.

Energy Secretary Vince Perez, however, maintained that as far as he knew, the representatives were at Meralco to represent the interest of the national government.

Meanwhile, Sen. Rodolfo Biazon called for safeguards against the emergence of Meralco as a power monopoly, as he raised the possibility that Meralco might gobble up struggling electric cooperatives in the province.

Perez said that possibility is very remote although he added that there is no prohibition in the Electric Power Industry Reform Act against the purchase of an existing electric power distribution firm.

Rafael Andrada, Meralco vice president and treasurer, said that under the law, a new franchise is required if a franchisee operates beyond its geographic boundaries.

Roland Quilala, National Power Corp. (Napocor) chairman, said he is opposed to the expansion of Meralco’s franchise. He explained that he expected Meralco to buy power from its own independent power producers and this would result in lower sales to Napocor and higher purchased power adjustments.

In a related development, Perez proposed the amendments of the Meralco franchise bill by removing the limit to the amount of shares that an entity could own. He said that under the present franchise, no entity could own more than 10 percent of Meralco except First Philippines Holdings, Inc. and the Philippine government.

"This cap should be removed as it discourages the entry of potential investors and gives First Philippines Holdings undue advantage in perpetuating its control over Meralco," he explained.