Disclose details of IPP contract review, senator urges government

The Arroyo administration was urged yesterday to reveal the full details of the results of its renegotiation on power supply contracts with at least 16 independent power producers (IPPs).

Opposition Sen. Teresa Aquino-Oreta made the appeal in reaction to reports quoting administration officials as saying the renegotiation has saved taxpayers about $850 million (roughly P44 billion).

Oreta said if that is true, the amount of purchased power adjustment (PPA) that millions of households and commercial establishments have been paying should be going down instead of rising.

The controversial PPA has been slowly going up and it now comprises a big part of the monthly electricity bill, she said.

She said a large portion of the PPA goes to the so-called IPPs.

Oreta noted that since the announcement of a government committee chaired by Finance Secretary Jose Isidro Camacho that most of the IPP contracts were disadvantageous to the government, nothing has been heard about such contracts.

One such contract was awarded to the Argentine firm Industrias Metalurgicas Pescarmona Sociedad Anonima. The Senate is now looking into allegations that the Impsa deal, costing about $450 million, is onerous and that the Argentine company paid $14 million in bribes to bag it.

Both Impsa and its supposed conduit, Manila Rep., Mark Jimenez, have denied the allegation. Jimenez is in jail in Miami, Florida where he is facing illegal election campaign contributions, fraud and tax evasion charges.

A hearing on the Impsa deal that involves state guarantees for the loans obtained by Impsa is set for this morning. Lenders led by Citibank have been invited.– Jess Diaz