AN antidebt watchdog urged members of Joint Congressional Power Committee (JCPC) on Tuesday to stop the Power Sector Assets and Liabilities Management Corp. (Psalm) from bidding the 25-year concession contract to operate the National Transmission Corp. (Transco), saying that the government could lose a minimum of around P246 billion in potential earnings.

Fr. Ben Moraleda, vice president of the Freedom from Debt Coalition (FDC), said that it is irrational on the part of the administration to privatize the operation of a vital and profitable government corporation that is earning more than P15 billion annually.

“Our legislators must intervene in this irrational and antipeople undertaking.  Based on its own valuation of Transco, the government could only earn about $3 billion, or P129 billion [$1 = P43] for 25 years if the bidding pushes through. Compare this with potential income of P375 billion. The government would lose P246 billion in earnings. Even if Transco could be bidded out at $6 billion based on the projected price of La Costa Corp.—the bidder that did not prequalify—the government would still earn more if it continues to operate Transco. Where is the rationality here?” asked Moraleda.

“It is appalling that the government is willing to lose this potentially huge amount of profit and consequently burden the consumers with inevitable electricity-rate increases just to immediately earn $3 billion and pay its multibillion-peso debts arising from power-sector projects and/or contracts, a number of which may be illegitimate or tainted with fraud. It is so myopic,” Moraleda said.

The FDC said that in the first half of this year, Transco profited almost P8 billion. The state-owned firm reported P15.7 billion and P16.2 billion of net income in 2006 and 2005, respectively. It said that the privatization of Transco will merely transfer the monopoly in the power industry from public to private.

“As a natural monopoly and as the biggest public utility, Transco is imbued with public interest. Thus, it must remain in the public sphere and held by public hands. Its privatization must be stopped,” Moraleda said.

“The public interest is at stake with the privatization of Transco. We can be held hostage by the private interests/companies that will be operating this utility into agreeing to higher rates they will be imposing on us. Although the transmission sector is a regulated sector, the rate-setting methodology used here allows Transco to earn profits beyond the 12-percent return-on-rate base limit observed in public utilities,” he added.

The FDC also echoed the concerns of some legislators that privatizing Transco poses a threat to national security. It added that the future concessionaire would only be accountable to its owners and not the public. 

According to FDC, the winning bidder would virtually hold the entire switchboard of the country and has the power to turn on and off the electricity at its own will.

“It is no wonder why many big businesses and influential families, including the family of Mrs. Gloria Macapagal-Arroyo, are interested to acquire this crown jewel of the government. Whoever operates Transco literally has the control and power,” the FDC said.

The Transco sale is scheduled on December 12 with four prequalified bidders. These are: Monte Oro Grid Resources Corp. (MOGRC) and State Grid Corp. of China (SGCC); Two Rivers Pacific Holdings Corp. and Terna-Rete Electtrica Nazionale S.P.A.; San Miguel Energy Corp. and TPG Aurora BV; and consortium of Citadel Holdings Inc. and Power Grid Corp. of India Ltd.

PRIVATE mining companies in the Philippines have urged French and British investors to explore the mining industry in the country as they presented information on the business opportunities at the recent high-level delegation in Paris, saying the Philippine economy has grown stable since the Asian crisis in 1997.

AFTER announcing that it plans to prepay debts of the state-run power company, the Power Sector Assets and Liabilities Management Corp. (Psalm) said Tuesday that it is ready to chop off a huge part of the government’s debt by prepaying up to $1 billion of the National Power Corp.’s (Napocor) loan obligations.

AN antidebt watchdog urged members of Joint Congressional Power Committee (JCPC) on Tuesday to stop the Power Sector Assets and Liabilities Management Corp. (Psalm) from bidding the 25-year concession contract to operate the National Transmission Corp. (Transco), saying that the government could lose a minimum of around P246 billion in potential earnings.

THE use of the mandated 1-percent coco-biodiesel blend (B1) has significantly cut down carbon emissions in Metro Manila, according to data from the Department of Environment and Natural Resources (DENR).

LAWMAKERS asserted Tuesday that the secretary of finance cannot assign to a subordinate his review powers under the Tax Code, especially if this authority was exclusively delegated to him by Congress.

THE transportation department signed a consultancy contract last week with the Aviation Systems Consultants Co. Ltd. (Asco) for the improvement of the country’s aviation industry.

A FISHERY nongovernment organization is asking the government to stop the ongoing oil and gas exploratory drilling in Tañon Strait off Cebu if the company conducting the exploration and the Department of Energy (DOE) would not offer compensations to 1,500 fishermen affected by the fishing ban.