Separate House probe of TransCo bidding opposed

Cebu Rep. Eduardo Gullas has expressed opposition to a colleague’s proposal for the House to investigate alleged irregularities in the recent bidding of the privilege to run the state-owned National Transmission Corp. (TransCo).

He said Congress should leave the inquiry into the TransCo bidding to the Joint Congressional Power Commission (JCPC), which is the body through which Congress oversees the implementation of the Electric Power Industry Reform Act (Epira) of 2001.

He said as far as he was concerned, “the bidding and the award of the contract is a settled transaction.”

“Mere claims of possible flaws cannot overcome the well-established presumption of regularity that applies to any open and competitive public bidding,” he said.

The privilege to run TransCo was won by Monte Oro Grid Resources Corp. with a bid of $3.95 billion. There is only one other bidder, San Miguel Energy Corp., which offered $3.905 billion. A third bidder, Metro Pacific-led Twin Rivers consortium, withdrew at the last minute for still unclear reasons.

Opposition senators suspect that billionaire port operator Enrique Razon, a close friend of President Arroyo and First Gentleman Jose Miguel Arroyo, is behind Monte Oro.

In opposing a separate House probe, Gullas was reacting to the proposal of pro-administration Rep. Monico Puentevella of Bacolod City that congressmen look into the alleged bidding irregularities. Puentevella said specifically, he wants to know why one bidder, La Costa, was disqualified despite the fact that it was ready to offer $6 billion, or twice the “indicative price” of $3 billion, for the privilege to operate TransCo.

“The difference (of more than $2 billion) between the offer of La Costa and the winning bid was seen by critics as very disadvantageous to the National Government and raised a question of doubt on the regularity of the bidding process,” he stressed.         La Costa is a consortium led by former Finance secretary Roberto de Ocampo and billionaire miner Salvador Zamora.

In a recent privilege speech, opposition Rep. Teofisto Guingona III questioned the government’s decision to set an “indicative price” of only $3 billion for the TransCo concession when it knew very well that La Costa was ready to offer $6 billion.

He said the indicative price was low considering that TransCo makes at least $400 million a year in net profits.

The government set a low price to favor some bidders, Guingona said.

Puentevella noted that before the bidding started, there were accusations that interested bidders violated the constitutional requirement that they should be at least 60-percent owned by Filipinos.

He said a San Miguel Corp.-led group and Metro Pacific-led Twin Rivers had accused each other of violating the requirement.        Additionally, Twin Rivers claimed that the San Miguel consortium would also violate the cross-ownership restriction under Section 45 of the Epira since it operates generation and distribution companies that are TransCo customers, he said.

He pointed out that if the accusations were true, Twin Rivers and San Miguel should have been disqualified from participating in the bidding. – Jess Diaz