Government studying fate of Agus Pulangi power plant - P-Noy

DAVAO CITY, Philippines  – President Aquino said yesterday a study is ongoing on what to do with the Agus-Pulangi hydroelectric power complex amid complaints from various sectors over its proposed privatization.

The Agus-Pulangi power complex accounts for 52 percent of the total hydroelectric power in the Mindanao Grid. The Power Sector Assets and Liabilities Management (PSALM) and the National Power Corp. (Napocor) have both pushed for its privatization following alleged massive losses in its operation.

“The question here should not just be whether to privatize or not the Agus-Pulangi complex but what would  be best to do with it,” the President said during a press briefing after meeting the participants of the People’s Organizations Congress held at the Grand Regal Hotel here.

“We have to know if the Agus-Pulangi power complex is earning or not or if it can fend for its operations and its improvement from its own income. Or if it can pay its debts,” the President added.

Aquino said there are many issues, including technicalities and mechanisms that needs to be reconciled.

Meanwhile, Mindanao Development Authority chairperson Luwalhati Antonino urged the PSALM and Napocor  to be honest with the earnings of the Agus and Pulangi hydro power complex for the past nine years.

Antonino said the state-owned Agus and Pulangi hydro power complex earned P68 billion or an average of P6 billion since 2001, contrary to the claim of PSALM president Emmanuel Ledesma Jr. that up to P15 billion in losses were incurred from 2001 to 2011.

Antonino said PSALM’s financial statement validated Mindanao stakeholders’ stand that the operations of Agus and Pulangi facilities had resulted in profits, citing the presentation during the Mindanao Power Summit held last May 13.

The plan to privatize the Agus-Pulangi hydro power complex comes in the face of the worsening power crisis in the south due to acute power supply shortage.

The National Grid Corporation of the Philippines placed the power deficit for Mindanao at 197 megawatts as the island’s supply peak stood at 1,079 MW while demand was pegged at 1,276 MW.

Based on the financial report of PSALM, Agus and Pulangi earned P68 billion net income but it was used to cover operating losses of other government facilities such as coal, geothermal and diesel-fired plants which accumulated a net loss of P83 billion over an 11-year period, resulting in an overall loss of P15.03 billion for government power assets in Mindanao.

“PSALM however, failed to state that P15.03 billion was not an actual loss because of what is called depreciation expenses or non-cash item amounting to P16.35 billion. Under strict cash basis accounting policy, factoring this yields P1.32 billion real net profit,” she said.

“PSALM should have been more forthright with the people of Mindanao when it explains its alleged losses in operating the government’s power facilities in Mindanao. PSALM’s statement cunningly presented half-truths by stressing only about losses, but not how Agus-Pulangui saved billions of government money,” Antonino said.