Pimentel said the extension of the payment deadline only lends credence to allegations that YNN Pacific, along with its partner Ranhill Berhad of Malaysia, enjoys the protection of powerful officials in the Arroyo administration.
The Power Sector Assets and Liabilities Management Corp. (PSALM) said the 30-day grace period will enable YNN-Ranhill to pursue its bid to acquire the coal-fired Masinloc plant for a total price of $561 million despite forfeiture of the company’s $14-million performance bond as penalty for defaulting on the payment for the third time.
"The action of PSALM bespeaks the hidden connection of YNN with administration officials. How else explain the lenient treatment PSALM has accorded YNN despite the failure of the latter to comply with its obligation to pay the downpayment of $227 million for the acquisition of the Masinloc plant?" Pimentel asked.
He said it is completely pointless to grant YNN Pacific another extension because it has been established that the company has no financial capability or technical expertise to fulfill its obligations under its asset purchase agreement with PSALM.
On the other hand, Pimentel said it is doubtful whether Ranhill Berhad of Malaysia can raise the capital for the power plant sale. "Based on its disclosure to the Malaysian Stock Exchange, Ranhil Berhad is primarily a consultancy firm and is managing only a 120-megawatt power plant project," he said.
Pimentel said PSALM officials run the risk of being sued in court for tolerating a deal that is disadvantageous to the government and giving favors to YNN, including the extension of the payment deadline.
"The PSALM board should be sued before the Ombudsman for giving undue advantage to YNN and causing prejudice to the interests of the government," he said.
"Had the PSALM officials conducted a serious investigation and due diligence audit on the capability and financial capacity of the bidder, then they would have realized that not only it was incapable of paying even the down payment but also it is a mere broker or conduit for the deal."
Pimentel added that this is "hardly the kind of investor that should participate in the privatization of the assets of the National Power Corp."
PSALM is one of the three state-run firms spun off from the privatization of debt-saddled Napocor. The other two are National Transmission Co., which has the task of privatizing Napocor’s electricity transmission facilities, and Generation Co., which is handling Napocor’s power generation facilities.