"We knew it! This was a big swindle all along!" exclaimed Casiño upon reading newspaper reports that Malaysian power firm Ranhill Bhd was buying out YNN Pacific Consortium Inc. for $8 million (about P424 million) so it can take over and operate the power plant.
Ranhill Bhd made the announcement Monday in a disclosure to the Malaysian Stock Exchange. It said it would now raise the $227 million down payment that YNN had failed to deliver to the government despite the lapse of two deadlines.
"YNN Pacific was not a serious buyer. It is not even a power utility firm. It was a special purpose vehicle created solely to win the Masinloc bid. Its owners are now cashing in by selling the company and its prized contract to a legitimate buyer," Casiño said.
He said YNN was just a four-month-old firm when it won the Masinloc contract.
"At that time, it did not have a decent office, had no experience in operating a power plant, and had a paid-up capital of only P625,000. And now, without even breaking a sweat, they are being bought by Ranhill for P424 million. Terrific!" he said.
Based on registration papers filed with the Securities and Exchange Commission, YNN Pacific Consortium was formed in July 2004, about six months before the December bidding for Masinloc. Its majority owner was businessman Sunny Sun of Duracom Power Corp.
The company had an authorized capitalization of P10 million, of which P625,000 was paid-up or in cash.
Casiño pointed out that it is unthinkable that officials of the Power Sector Assets and Liabilities Management Corp. (PSALM) could not have known these facts and the obvious scheme behind a grossly undercapitalized company bidding for a P30-billion power plant.
In fact, the Bayan Muna lawmaker said these officials "knew they were selling a crown jewel of the National Power Corp. — its biggest and most efficient power plant — to a sleek operator like YNN," he stressed.
Energy Secretary Raphael Lotilla was PSALM head when the agency sold the Masinloc plant.
Casiño said Ranhill and PSALM should now reveal whether the Malaysian firm’s buyout of YNN included a power supply contract with Meralco, which YNN has been trying to work on.
"If the purchase includes a supply contract with Meralco, the public has the right to know the terms and conditions of this contract because it may invariably mean higher power rates," he said.
He added that whatever rates Ranhill decides to charge Meralco and other power distribution companies, these rates would need to be passed on to consumers with the approval of the Energy Regulatory Commission (ERC).
He also said he would like to know "what is the role of ERC in this entire mess."
He said he learned that the commission was trying to facilitate the negotiation of supply contracts between YNN and distribution utilities.