Two opposition lawmakers back scrapping of P30-B Masinloc power plant

Two opposition congressmen supported yesterday the plan of the House committee on energy to recommend the cancellation of the sale of a P30-billion power plant in Zambales due to the winning bidder’s failure to pay up.

Representatives Rolex Suplico of Iloilo and Teodoro Casiño of the militant party-list group Bayan Muna said they would support the plan announced by Lanao del Norte Rep. Alipio Badelles, energy committee chairman.

Suplico said the government, through the Power Sector Assets and Liabilities Management Corp. (PSALM), has been too accommodating to the winning bidder, YNN Pacific Consortium.

"They have failed twice to deliver on their part of the bargain. If they fail again, the government should cancel the sale and conduct a new bidding for the 600-megawatt power plant in Masinloc, Zambales," he said.

He said PSALM officials should explain why they were being "too soft" on YNN.

He added that the energy committee could take up the YNN contract in its meeting today.

Suplico is a member of the committee and the congressional power commission that continually checks on the sale of assets of the state-owned National Power Corp. (Napocor).

The commission will meet on Thursday and would also take up the Masinloc plant sale.

YNN won the bidding for the plant in December 2004, about six months from the formation of the company, which has an authorized capitalization of P10 million. It offered $562 million (about P30 billion) for the plant.

The government gave the winning bidder up to the end of 2005 to pay 40 percent, or more than $200 million, of its bid, but YNN failed to produce the money. The deadline was extended to March this year, and again extended to June 30 this year.

For his part, Casiño said the failure of YNN to deliver its initial payment to the government "confirmed our worst fears that it does not have sufficient financial capability."

"We have to scrap this sale, which is so far the largest privatization of a Napocor plant and redo the auction again. The failure of the bidder to deliver on its promise does not augur well for the privatization program," he said.

He said PSALM should have already revoked the sale and confiscated YNN’s $11-million performance bond.

But instead of scrapping the sale and confiscating the bidder’s bond, PSALM extended the deadline twice, he noted.

"What kind of a management do we have in PSALM? What has YNN Pacific offered them to deserve such an extension? Did they believe this four-month-old upstart company?" he asked.

He and other militant party-list representatives filed Resolution 468 seeking an inquiry into the sale of the Masinloc plant.

The calls of congressmen for the scrapping of the YNN contract and for a new bidding followed a similar clamor from Senators Joker Arroyo and Aquilino Pimentel Jr.

Arroyo said the government should take action to protect its interests.

"It has already been over a year (since the sale of Masinloc). This privatization project is already overextended," he said.

Arroyo had revealed that YNN was a new corporation only recently registered with the Securities and Exchange Commission (SEC) when it won the bidding for the Zambales power plant. The senator himself checked the office address in Paco, Manila that the company had listed in its registration papers, but it turned out to be a janitorial office. He said YNN had no staff and no telephones.

Pimentel said it was unthinkable for PSALM to have waited so long for YNN’s payment. He said the government should go after the bidder’s performance bond.

"Then it can rebid Masinloc so we can find another bidder with the technical and financial capability," he said.