Pimentel wants probe on entry of Malaysian firm in consortium
By MARIO B. CASAYURAN, Manila Bulletin
Senate Minority Leader Aquilino Q. Pimentel Jr. sought yesterday a hearing by the Congressional Oversight Committee on Power on the questionable entry of a Malaysian firm into the YNN Pacific Consortium which reneged on its contract with a state-owned power firm following its successful 1.7-million bid last December for the coal-fired Masinloc power plant in Masinloc, Zambales.
Pimentel said the committee should also look into the hand of former President Fidel Ramos in the proposed entry of Ranhill Berhad, a Malaysian power utility firm, into the country’s power sector.
He sought the revocation of the sale of the 600-megawatt Masinloc plant to YNN which reneged on its payment of the $ 277-million upfront fee to the state-owned Power Sector Assets and Liabilities Management (PSALM) Corp.
Pimentel, a former Senate President, did not elaborate on why the committee should look into Ramos’ hand on the proposed entry of Ranhill.
The congressional oversight committee is cochaired by Sen. Miriam Defensor Santiago.
The political opposition had criticized the controversial contracts entered into by Ramos during his administration in 19921998 with independent power producers (IPPs) as monthly power bills of consumers increased dramatically.
The IPP contracts were signed by the Ramos administration to solve the acute power shortage that hit the country starting at the later part of the Aquino administration.
Ranhill was recently quoted as saying that it, through its board of directors, entered last June 15 into a share sale agreement to acquire the entire equity interest in YNN for a total of $ 8 million from the existing shareholders of YNN and to subscribe for new shares in YNN.
Sen. Joker Arroyo, chairman of the Senate Blue Ribbon Committee, said YNN appears to be incapable of honoring its purchase agreement with PSALM as it does not even have a decent office.
Pimentel said YNN Pacific’s performance bond — originally amounting to $ 11.2 million and later increased to $ 14 million — should be forfeited in favor of the government in accordance with the terms and conditions of the sale agreement.
"YNN Pacific’s agreement with PSALM should be cancelled and its bond should be confiscated," Pimentel said.
Arroyo had stressed that the PSALM-YMM Pacific contract must be rescinded because YNN has apparently no technical or financial capability to implement the project.
Pimentel said a new bidding should be held since the frantic efforts of YNN Pacific to look for a new partner for the infusion of much-needed capital only confirmed the criticism that the winning bidder does not have the financial muscle or technical expertise to run the coal-fired power plant.
"Ranhill Berhard should be treated as a new offer if qualified, it should be taken seriously by PSALM. The law on failed bidding should be applied on the projected Masinloc sale to YNN," he added.
Pimentel also said that other considerations should be imposed in the entry of any new investor so that the pollution emanating from the Masinloc operations are reduced or eliminated under the new management.
Provisions or the disposal of coal dust should be provided for in the new agreement, he said.
Senate Minority Leader Aquilino Q. Pimentel Jr. sought yesterday a hearing by the Congressional Oversight Committee on Power on the questionable entry of a Malaysian firm into the YNN Pacific Consortium which reneged on its contract with a state-owned power firm following its successful 1.7-million bid last December for the coal-fired Masinloc power plant in Masinloc, Zambales.
Pimentel said the committee should also look into the hand of former President Fidel Ramos in the proposed entry of Ranhill Berhad, a Malaysian power utility firm, into the country’s power sector.
He sought the revocation of the sale of the 600-megawatt Masinloc plant to YNN which reneged on its payment of the $ 277-million upfront fee to the state-owned Power Sector Assets and Liabilities Management (PSALM) Corp.
Pimentel, a former Senate President, did not elaborate on why the committee should look into Ramos’ hand on the proposed entry of Ranhill.
The congressional oversight committee is cochaired by Sen. Miriam Defensor Santiago.
The political opposition had criticized the controversial contracts entered into by Ramos during his administration in 19921998 with independent power producers (IPPs) as monthly power bills of consumers increased dramatically.
The IPP contracts were signed by the Ramos administration to solve the acute power shortage that hit the country starting at the later part of the Aquino administration.
Ranhill was recently quoted as saying that it, through its board of directors, entered last June 15 into a share sale agreement to acquire the entire equity interest in YNN for a total of $ 8 million from the existing shareholders of YNN and to subscribe for new shares in YNN.
Sen. Joker Arroyo, chairman of the Senate Blue Ribbon Committee, said YNN appears to be incapable of honoring its purchase agreement with PSALM as it does not even have a decent office.
Pimentel said YNN Pacific’s performance bond — originally amounting to $ 11.2 million and later increased to $ 14 million — should be forfeited in favor of the government in accordance with the terms and conditions of the sale agreement.
"YNN Pacific’s agreement with PSALM should be cancelled and its bond should be confiscated," Pimentel said.
Arroyo had stressed that the PSALM-YMM Pacific contract must be rescinded because YNN has apparently no technical or financial capability to implement the project.
Pimentel said a new bidding should be held since the frantic efforts of YNN Pacific to look for a new partner for the infusion of much-needed capital only confirmed the criticism that the winning bidder does not have the financial muscle or technical expertise to run the coal-fired power plant.
"Ranhill Berhard should be treated as a new offer if qualified, it should be taken seriously by PSALM. The law on failed bidding should be applied on the projected Masinloc sale to YNN," he added.
Pimentel also said that other considerations should be imposed in the entry of any new investor so that the pollution emanating from the Masinloc operations are reduced or eliminated under the new management.
Provisions or the disposal of coal dust should be provided for in the new agreement, he said.
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