Congress eyes blacklist of Masinloc deal winner
By Angie M. Rosales - Daily Tribune
Senators and congressmen are planning to blacklist the winning bidder in the highly controversial sale of the 600-megawatt Masinloc power plant in Zambales province for putting in suspension government’s anticipated P31.8 billion income to be generated from the privatization of the said asset of the debt-ridden National Power Corp. (Napocor).
Iloilo Rep. Rolex Suplico made the proposal during a recent hearing conducted by the Joint Congressional Power Commission (JCPC).
His proposal earned the support of some of his colleagues, who sit as co-members of the bicameral body, even as they pushed for the adoption of stricter screening measures and transparency in the disposition of Napocor assets.
Suplico also called for the setting in place of safety nets following the Masinloc episode, where its winning bidder, the YNN Pacific Consortium, is being castigated by the government for failing to meet its financial obligations, as well as the alleged anomalous extensions given to it by energy officials on its deadline to pay an upfront fee of $227 million, which is the fee mandated 40 percent of their $561 million acquisition offer.
Suplico’s call was immediately supported by Batanes Rep. Dina Abad, who noted the Power Sector Assets and Liabilities Management Corp.’s (Psalm) failure to check on the track record of YNN which would have ensured a “no-snag” privatization of Masinloc, the biggest power generation asset of the government.
YNN was reported to be seeking a partnership with the Malaysian firm Ranhill Berhad and an Australian-based company as it faces possible forfeiture of its $11.2-million performance bond.
This tie-up, lawmakers said, is now allowed as the contract granted YNN does not carry a provision to have a new player come into the picture after the bidding had been made.
Abad also said there was nothing that could stop the winning bidder from seeking a new partner to fulfill its contract.
“The issue is, when you award something to a particular group, they have the financial capability, technical track record. I don’t know about the suggestion of Suplico in terms of blacklisting groups. But for me what is more important is a transparent and more diligent process. There are many other things, power plants, bidding processes that the government is undertaking, and I have not been satisfied with the due process that is being done,” she told the hearing which the Department of Energy officials attended and submitted a report on the bidding of the contract.
Energy Secretary Raphael Lotilla explained that according to the observations of the department’s financial advisers, when they were still putting up the privatization program, they were aware that the government does not have to put down technical pre-qualification requirements in the bidding so that even a financial institution would be able to bid for the asset.
“You see, early on we were really over-capacity so even if the financial institution which does not have the technical capability to operate is the one who acquires and just really holds on to the assets at that point, then that is okay because then we have over-capacity. That was part of the discussions actually and they can actually dispose of the assets at that time when they will be able to make money.
“And somebody who is going to come up with that amount is going to make sure in fact that it has a technically-capable partner or can take all the operational partner. So these are the background of that particular discussion and decisions.
“On the financial (side), the decision was also made to base the financial (requirement) primarily on the performance bond or the bond that was going to be put up.
“On inquiring as to who are these people, we have to have a point where we stop going back and to inquire. For example, as what point to do we say that somebody is qualified or not. You said that questions have been raised against character of this person…at the end of the day, we have to take at look at documents prepared etc. But at to say that a certain corporation is to be disqualified because we have some doubts about the character of a person who is part of the consortium, that’s where the lines become blurred at that point because one can be also arbitrary now in imposing (the ban),” Lotilla said.
Rep. Alipio Cirilo Badelles, JCPC co-chairman, noted that as far as adopting measures to protect the interest of the government, the responsibility lies on the “implementor,” which in this case was Psalm.
But Suplico would not have any of it, saying that the matter on Masinloc was too serious to be left unattended to by the government.
“Mr. chairman, records show that the Masinloc sale is 99 percent of the sales in dollars and that’s around $561.7 million for a total of amounts sold, in terms of dollars, $566.92 million. In terms of pesos, it’s also 99 percent of P31.8 billion sold assets of Napocor. That’s 99 percent of the total privatization effort of the government. Ninety-nine percent is dependent on the sale of Masinloc,” he pointed out.
“I don’t want a repeat of what happened in Masinloc, Mr. chairman. Would they allow observers to witness the proceedings? And maybe we could have a blacklist of players in the industry, like (YNN owner) Sunny Sun. Well, so far they have not complied with their commitments. It’s still hanging, Mr. Chairman.
“I think, Mr. Chairman, literally, we are being taken for a ride,” Suplico averred.
Senators and congressmen are planning to blacklist the winning bidder in the highly controversial sale of the 600-megawatt Masinloc power plant in Zambales province for putting in suspension government’s anticipated P31.8 billion income to be generated from the privatization of the said asset of the debt-ridden National Power Corp. (Napocor).
Iloilo Rep. Rolex Suplico made the proposal during a recent hearing conducted by the Joint Congressional Power Commission (JCPC).
His proposal earned the support of some of his colleagues, who sit as co-members of the bicameral body, even as they pushed for the adoption of stricter screening measures and transparency in the disposition of Napocor assets.
Suplico also called for the setting in place of safety nets following the Masinloc episode, where its winning bidder, the YNN Pacific Consortium, is being castigated by the government for failing to meet its financial obligations, as well as the alleged anomalous extensions given to it by energy officials on its deadline to pay an upfront fee of $227 million, which is the fee mandated 40 percent of their $561 million acquisition offer.
Suplico’s call was immediately supported by Batanes Rep. Dina Abad, who noted the Power Sector Assets and Liabilities Management Corp.’s (Psalm) failure to check on the track record of YNN which would have ensured a “no-snag” privatization of Masinloc, the biggest power generation asset of the government.
YNN was reported to be seeking a partnership with the Malaysian firm Ranhill Berhad and an Australian-based company as it faces possible forfeiture of its $11.2-million performance bond.
This tie-up, lawmakers said, is now allowed as the contract granted YNN does not carry a provision to have a new player come into the picture after the bidding had been made.
Abad also said there was nothing that could stop the winning bidder from seeking a new partner to fulfill its contract.
“The issue is, when you award something to a particular group, they have the financial capability, technical track record. I don’t know about the suggestion of Suplico in terms of blacklisting groups. But for me what is more important is a transparent and more diligent process. There are many other things, power plants, bidding processes that the government is undertaking, and I have not been satisfied with the due process that is being done,” she told the hearing which the Department of Energy officials attended and submitted a report on the bidding of the contract.
Energy Secretary Raphael Lotilla explained that according to the observations of the department’s financial advisers, when they were still putting up the privatization program, they were aware that the government does not have to put down technical pre-qualification requirements in the bidding so that even a financial institution would be able to bid for the asset.
“You see, early on we were really over-capacity so even if the financial institution which does not have the technical capability to operate is the one who acquires and just really holds on to the assets at that point, then that is okay because then we have over-capacity. That was part of the discussions actually and they can actually dispose of the assets at that time when they will be able to make money.
“And somebody who is going to come up with that amount is going to make sure in fact that it has a technically-capable partner or can take all the operational partner. So these are the background of that particular discussion and decisions.
“On the financial (side), the decision was also made to base the financial (requirement) primarily on the performance bond or the bond that was going to be put up.
“On inquiring as to who are these people, we have to have a point where we stop going back and to inquire. For example, as what point to do we say that somebody is qualified or not. You said that questions have been raised against character of this person…at the end of the day, we have to take at look at documents prepared etc. But at to say that a certain corporation is to be disqualified because we have some doubts about the character of a person who is part of the consortium, that’s where the lines become blurred at that point because one can be also arbitrary now in imposing (the ban),” Lotilla said.
Rep. Alipio Cirilo Badelles, JCPC co-chairman, noted that as far as adopting measures to protect the interest of the government, the responsibility lies on the “implementor,” which in this case was Psalm.
But Suplico would not have any of it, saying that the matter on Masinloc was too serious to be left unattended to by the government.
“Mr. chairman, records show that the Masinloc sale is 99 percent of the sales in dollars and that’s around $561.7 million for a total of amounts sold, in terms of dollars, $566.92 million. In terms of pesos, it’s also 99 percent of P31.8 billion sold assets of Napocor. That’s 99 percent of the total privatization effort of the government. Ninety-nine percent is dependent on the sale of Masinloc,” he pointed out.
“I don’t want a repeat of what happened in Masinloc, Mr. chairman. Would they allow observers to witness the proceedings? And maybe we could have a blacklist of players in the industry, like (YNN owner) Sunny Sun. Well, so far they have not complied with their commitments. It’s still hanging, Mr. Chairman.
“I think, Mr. Chairman, literally, we are being taken for a ride,” Suplico averred.
posted by OlongapoCity Zambales at
8:13 PM
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