4 big firms to vie for Albay power concession

LEGAZPI CITY—At least four giant firms have signified their intention to buy the Albay Electric Cooperative (Aleco) during the pre-bid conference held here last Monday in a bid to give life to the dying cooperative through privatization.

Efforts to rehabilitate the heavily debt-burdened Aleco have failed miserably during the past 30 years that private sector participation (PSP) was deemed as the only hope to recover, according to Veronica Briones, the National Electrification Administration (NEA) designated project supervisor for Aleco.

The pre-bid conference yielded the names of interested buyers as the Aboitiz Group, San Miguel Corp., the Lopez Group and another one whose identity was requested withheld temporarily, said Aleco interim board of director chairman Bishop Joel Baylon of the Diocese of Legazpi in an exclusive interview.

The Aboitiz Group owns the Tiwi geothermal power in Tiwi, Albay, and the Lopez Group, the Bac-Man Geothermal power partly occupying the towns of Bacon in Sorsogon and Manito in Albay.

Aleco was alternately managed by its consumers-elected board of directors and NEA during the past three decades. However, it showed no sight of improvement, making it one of the country’s three worst cooperatives with its high 24-percent system loss.

Albay Gov. Joey Sarte Salceda has long admitted Aleco as a “problem cooperative” that in early 2011, he forced the entire Aleco board to resign as a pre-condition of the NEA’s take-over to save Aleco for its more than 200,000 consumers.

Bishop Baylon who initially headed the defunct Aleco Crisis Management Committee under NEA management control since 2011, however, said Aleco is not going to privatize, saying it would be merely entrusted to a firm acting as a “concessionaire” through a bidding to manage its operation and maintenance.

“This is a Private Sector Participation [PSP] scheme that the interim board has crafted after thorough consultations and study,” the Bishop said. The concessionaire will have an initial contract of 25 years, renewable for another 25 years maximum, the bishop said.

The multi-sectoral stakeholders group including the Aleco Employees Union rejected the NEA’s move, saying the PSP is itself privatization that consumers should expect a sure power-rate increase. The protesters headed by lawyer Bartolome Rayco said it would fight for the retention of Aleco as a cooperative with a proposal for a coop-to-coop partnership as an option to bail out Aleco from its debt suffering.

Rayco, the lawyer of the Aleco Employees Union, said they had already negotiated with the Benguet Electric Cooperative for the co-op-to-co-op partnership.

Baylon said the proposed PSP has generated support from the Department of Energy, NEA, Albay congressmen, and local officials, saying PSP is the general welfare interest. Baylon said the protesters proposal for a co-op-to-co-op partnership had been initially considered by the interim board but not viable with Aleco’s P4-billion debts. He said electric cooperatives have their own problems and would not partner with a problem cooperative.

The Ako Bicol Party-list in 2011 had touted Aleco as extremely graft-ridden both under the Aleco board and NEA management.

Bishop Baylon said whoever wins the bidding would include the buy-out of Aleco’s close to P4-billion debts, the reason Aleco could not take off from bankruptcy.

He added that under the contract, all Aleco employees would be deemed resigned; however, the concessionaire would appropriate P260 million for those who would not be rehired, saying they would get their separation pay not on installment but a one-time pay. He said the basis of the computation for the separation pay is both the legal means and the Aleco Collective Bargaining Agreement whichever is higher.

Aleco has 500 regular employees but is reportedly overcrowded with non-regular employees recommended by politicians and Aleco officials themselves.

Baylon said under a concessionaire contract, consumers would no longer suffer the discrimination treatment especially the poor who are easily disconnected for non-payment of bills, and the rampant allegations of padded billing where the usual monthly average electric bill of P2,000 suddenly surged to P5,000 and the only convincing defense open to a consumer is “pay your bills or disconnection.”