The FVR-IPP scam on Mindanao

CONSUMERS' DEMAND!
Herman Tiu Laurel
3/12-18/2012



For this issue I had wanted to write about the US State Department report on the Philippines as “one of the world’s most highly mineralized countries” with an untapped wealth of over $840 billion or around P40 trillion. But with the way Filipinos are already surrendering their present earnings and wealth to historic scams of powerful foreign and domestic plunderers, our children and the next generations will never ever get to taste the fruits of our national patrimony.

In this regard, there are two current issues that highlight the situation of our country: One is mining while the other concerns electricity. As there is an urgent development in the latter, I am compelled to focus more on the power issue, but still dwell a bit on mining later.

Why the urgency? That’s because there is again another case of corrupt government bureaucrats conniving with power oligarchs to foist more FVR-type IPP (independent power producer) deals for the next 20 years--this time, in Mindanao.

As we speak, there is an ongoing contrived power crisis of five to eight-hour brownouts in many parts of Mindanao, wreaking havoc to the island’s economy and the people’s lives. It was without a doubt brought on through deliberate non-maintenance and non-dredging of Mindanao’s abundant hydroelectric dams and facilities over the years, as the EPIRA (Electric Power Industry Reform, which I’d rather call “Deform,” Act) dictates the privatization of all government power generation assets and bans government from ever engaging in such activity even when emergency situations, where only swift government aid can help, would call for it.

The unfolding development is similar to what Cory Aquino and Joker Arroyo (who placed the Department of Energy under the Office of the President to ensure easy manipulation) did in mothballing the Bataan Nuclear Power Plant (BNPP) and four hydropower development projects, which ensured a power crisis that bloomed into a full disaster during Ramos’ time, which Ramos then used to sign lucrative IPP contracts way beyond the maximum the ADB warned of.

This time, we can clearly discern the sinister plot of the power oligarchs and the corrupt top government bureaucrats they endorsed when a call was made to shift away from hydropower. One of their former executives, for instance, Energy Secretary Rene Almendras, said last week, “Considering the future lower rainfall forecast in Mindanao, we cannot rely solely on hydropower plants. Non-hydro baseload is immediately needed and this will only happen if everyone cooperates,” with the report stating that “Key to this is fast-tracking the process of obtaining local government permits in setting up power plants.”

To zero in on the larcenous angle, I should report on what Mr. Jojo Borja, part owner of Iligan Light, narrates: “IPPs are Build-Operate-and-Transfer projects and many were set up since FVR’s time; after their contracts finish, these are transferred to government, which is banned by the EPIRA from engaging in power generation. So the power oligarchs will buy back these IPPs for a tenth of their worth with a few crumbs to local officials.”

As in the Cory-FVR-Arroyo IPPs, the new Mindanao IPPs will get “take-or-pay” terms or the infamous PPAs (power purchase agreements), where power rates will be based on a “re-evaluated” replacement cost of such power plants made three times higher than the “giveaway” acquisition cost from government and re-evaluated (or escalated) every three years as the Energy Regulatory Commission (ERC)-formulated Performance Based Regulation (PBR) stipulates.

This is how Manny Pangilinan’s Meralco has been able to make an average of 100% increase in profits every year since 2006, affording him the limitless funds to buy everything, from basketball teams to a second TV network, to PAL, to several new seats in the Inquirer and Philippine Star, so as to control public perception of the plundering rampage, ad nausea.

In Mindanao, it will be the Aboitizes and the Alcantaras or their dummies lording it over, with IPP contracts to last the next 20 years and with double the power rates. Pity Mindanao as we have pitied the rest of the country victimized by the EPIRA, the ERC, and the collusion of corrupt politicians and the oligarchy.

Manila did not awaken to the historic scam until years later when, contrary to EPIRA proponents as well as Meralco congressmen and senators’ claims, power prices did not go down and competition did not thrive. Power rates, in fact, doubled and a pluto-poly (control by the plutocracy) emerged.

Privatization did not erase the $18-billion debt burden of the power sector on government even by just a dollar--this after 10 years with 90% of the state’s power assets privatized.

What a gigantic scam this has been and continues to be while our senators and congressmen entertain fools who may still believe they mean anything well for the country. So we must not allow the hoax to go unreported. Jojo Borja has been helping to rally Mindanaoans against this historic scam in Mindanao, which may even spark a revolution for the entire archipelago.

As for that US State Department report on our enormous untapped mineral wealth, we have long written about it from intelligence tidbits gathered over the years. For example, we’ve repeatedly heard of nationalist economist Alejandro “Ding” Lichauco having picked up a satellite sensing report of the US that shows the whereabouts of massive reserves of oil, gas, and other minerals in our islands and seas as far back as the 90s.

We have also heard Nur Misuari use the same report to make the case that those areas must not be given away when controversy on the Memorandum of Agreement on Ancestral Domain (MoA-AD)’s ceding of territories to the US dummy MILF exploded.

The timing of that report is clearly in aid of the large scale mining interests that are pushing their case against any opposition to their avaricious and destructive mining that will exhaust all of the nation’s mineral resources before it is able to tap them all by itself in order to preserve these as a legacy for our future.

Next column: “Their ‘mining’ is not our mining.”

(Tune in to 1098AM, DWAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN’s HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on “New Mindanao IPP scams of DoE;” visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)