Meralco power grab, Part III

IN World War II, Japanese occupation forces forcibly took over the ownership of the Manila Electric Co. (Meralco) and, in so doing, destroyed most of its operations.

However, in 1962, Don Eugenio Lopez Sr. acquired Meralco in the belief Filipinos could manage the power company better than the Americans, who used to own the power company before the war.

From 1962 to 1972, Lopez Sr. increased Meralco’s power-generating capacity five times, but never foresaw that it was neither an American or a Japanese but a Filipino—President Ferdinand E. Marcos—who would grab its ownership from its legitimate owners.

When Marcos declared martial law in September 1972, his regime “nationalized” Meralco, took over ownership from Lopez, and imprisoned his son Eugenio Jr. on charges of conspiring to assassinate the President.

The ownership was transferred to a newly created company called the National Power Corp. (Napocor), which, according to the World Bank, is one of the most corrupt, most inefficient and most heavily indebted state agencies up to this time.

Also, according to the Energy Regulation Commission, the present-day Napocor had been overcharging its customers P10 billion, representing over-recoveries since 2006.

After the downfall of Marcos, the Lopezes were able to reacquire at least 33.4 percent of Meralco, but it seems that the new government, now under the leadership of President Arroyo, is hell-bent on pushing out the Lopezes from the power sector.

The latest power grab, takeover in more polite terms, is being pushed by Winston Garcia, chairman of the Government Service Insurance System (GSIS) and son of Rep. Pablo Garcia of Cebu City, who had earlier lost to then-Speaker Jose de Venecia Jr. for the speakership.

GSIS owns at least 23 percent of Meralco but Garcia himself is being attacked left and right in the media about his handling of GSIS funds that include his controversial purchase of Juan Luna paintings, delayed pension remittances from members and nonpayment of salary loans and benefit claims.

An article written by Sheila Samonte-Pesayco has also alleged that a $14-million insurance Napocor had gotten from GSIS was overpriced. She also showed how Winston Garcia had been partial to Jardines, which, in 2000, earned a hefty $3.3 million in commissions and fees from Napocor’s account. Napocor alleges that the contract was overpriced by nearly $8 million.

President Arroyo has been denying that Malacañang is behind the takeover pursuit of Garcia, but her son Rep. Juan Miguel “Mikey” Arroyo earlier said the House Committee on Energy, which he heads, will investigate claims that Meralco’s power rates are exorbitant.

Some say the attacks from Malacañang on the Lopezes were being made to defuse or divert attention from controversies the government may be involved in, such as the NBN-ZTE overpricing scandal and the refusal of former National Economic and Development Authority chief Romulo Neri to appear before the Senate.

The problem is this: Will Garcia and the Napocor officials be willing to appear before congressional bodies in light of the Meralco takeover without invoking the executive privilege that Neri is using to avoid being questioned by the lawmakers?

In any case, even former budget secretary Benjamin Diokno, an economics professor at the University of the Philippines, considers a state control of Meralco as a “giant step back.”

A government “that can’t even manage traffic or collect garbage properly has no business running Meralco,” Diokno said.  

E-mail: raulbvalino@yahoo.com.ph

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Mirror on the wall: Meralco power grab, Part III

IN World War II, Japanese occupation forces forcibly took over the ownership of the Manila Electric Co. (Meralco) and, in so doing, destroyed most of its operations.

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