Hydro-electric swindle, again

DIE HARD III
Herman Tiu Laurel
4/1/2011



Can anyone help me make heads or tails of statements made two weeks ago by the Power Sector Assets and Liabilities Management (Psalm) Corp. president and chief executive officer? Emmanuel Ledesma Jr. said that when the Electric Power Industry Reform Act (Epira) was enacted in 2001, state-owned National Power Corp. (Napocor)’s accumulated financial obligations stood at $16.39 billion. Then, in the same breath, he revealed that for the period of 2001 to 2010, his agency had already paid $11 billion in Napocor debts, including principal and interest, plus $7 billion in independent power producers (IPPs) obligations, all totaling $18 billion, but that the state power generating firm still had outstanding debts of $15.821 billion.

How in heaven or hell’s name could Napocor have started with a $16.39-billion debt and still end up with $15.821 billion, after supposedly paying out $18 billion over 10 years, amid massive privatization (at 70 percent as of 2008) of its fossil fuel, geothermal, and hydro-power generating as well as transmission assets?

Where did all that money go? And, despite hundreds of billions in additional charges to almost 12 million electricity consuming households and establishments, the debt practically remains the same after 10 years. Only the docility and credulity of the Filipino people, as induced by local media and the conspiracy of the political and economic ruling class, could have allowed this swindle to pass without any major revolt.

And a grand, stupendous swindle it is, committed with the dexterity of magicians right before the eyes of millions, over the forewarnings and protestations of consumer advocates such as the National Association of Electricity Consumers for Reforms (Nasecore), the Freedom from Debt Coalition (FDC), Sulo ng Pilipino, EmPower, Kaakbay, and countless others.

Today, Psalm and its benefactors are aiming to raise the privatization level to 80 percent. The immediate target is, of course, Angat Dam in Norzagaray, Bulacan, which serves the water needs of 12 million Metro Manila denizens plus those of surrounding provinces such as Pampanga, Bulacan, etc., not to mention irrigation for 35,000 hectares of farmlands, while producing 246 megawatts of electricity for the Manila Electric Co. (Meralco) franchise area of at least five million connections.

Psalm actually declared a privatization winner already in 2010. But when the FDC sought complete and accurate information on the bidding for said project, it was flat-out denied, as Psalm claimed that the latter is not a party of interest, all the while requiring $2,500 for any requested document. The deal was only stopped when the Supreme Court (SC) declared a status quo ante until the agency can sufficiently provide such information.

Every Filipino today must really stop to think about these strange turn of events. Whether it is in toll ways, water concessions, or power projects, bid documents are no longer open to the public under the pretext of “confidentiality.” When did this come to be the rule in a “democracy,” more so in public projects imbued with public interest, where it has always been expected that the public has the basic right to know?

It’s good the current SC did right and stopped the Angat privatization on its track. But there are other very serious questions that must be raised, such as Psalm’s awarding of Angat to K-water (or Korea Water Resources Corp.), a 100-percent Korean firm, which violates the very fundamental constitutional rule of dominant corporate ownership of Filipinos in public works projects. In this case, it’s even worse, as K-water, which is not only foreign but also state-owned, will now be tasked to handle a strategic Philippine national utility!

One of the unexpected snags in this deal came from the Metropolitan Waterworks and Sewerage System (MWSS) regulatory office, in tandem with Manila Water and Maynilad, all of whom raised objections to ensure their water supply commitments (as well as profit targets). But since the National Grid Corp. of the Philippines (NGCP) — a consortium led by China State Grid with the Sy group now at the helm — also hankers for Angat to provide the transmission firm’s “power stability and reliability needs,” in case of a shortage of supply, which sector gets served first and for which purpose?

It’s timely to point out that Tokyo Electric Power Co. (Tepco), the private company that runs the Fukushima nuclear reactors, is now rightly or wrongly under fire from many quarters for delaying radical measures to safeguard public safety. The Japanese government, otherwise known for its integrity and efficiency, was practically put in a bind as it could only play second fiddle to the private operator of the crippled nuclear reactors.

As told by war correspondent and former UN investigator Keith Harmon Snow to Russia Today: “What we would like to see is for the government to take control of these nuclear reactors from private corporations, because private corporations’ main purpose for existence is to maximize profits, and by maximizing profits in the nuclear sector, we are talking about minimizing concerns for public health and safety.”

We thus recall “Ondoy,” where the private water concessionaires’ alleged interest to fill the water reservoirs to the brim contributed to the over-accumulation and, consequently, the unmitigated release of water at the critical level. If such a calamity were to occur again, will the private concessionaires act to preserve public welfare or risk it for their bottom lines? Billions of tons of water can be just as devastating as a nuclear holocaust.

Likewise, if Angat were to be swindled from the people, then the Agus-Pulangi Hydro Complexes in Mindanao, the Caliraya-Botokan-Kalayaan Hydro Plants, the Sucat Thermal Plant, as well as Power Barges 101 and 104 will follow until nothing — repeat, NOTHING — is left. And no proceeds from these will ever redound to a reduction of Napocor’s debts, now representing 20 percent of our total P5-trillion national debt. This is but one of the many perils of privatization for the public welfare… and a swindle too tragic to bear.

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