The myth of privatization

BACKBENCHER

Rod P. Kapunan

4/21-22/2012

The privatization of the power industry, as the neo-liberals would articulate, marked the culmination of the private sector's partnership with the government. It was a partnership anchored on the validity of the capitalist system; that only the private sector, specifically the privatization of the power industry, could bring about the desired efficiency in power supply, reduce the cost of electricity, assure the public of continuous supply, create more industries, promote employment, and residually bring about prosperity to the nation through increased revenues.

Indeed, that was how the advocates simplified the theoretical consequence of privatization, insisting it could reach its maximum efficiency only under an era of complete deregulation. There was little room for doubt because, as they would say, the economy revolves wholly on common sense; that one can never stop the downstream flow of the river. As their high priest would often remind us, water will always seek its own level, but failing to draw the line that often, common sense seldom matches reality.

For that we swallowed hook, line and sinker that policy because the theory promised to delivery efficiency on the basis of an unregulated power industry. Nobody mentioned the system was at the outset bound to fail much that it was based on a defaulted economic proposition; that efficiency must always come in at a price but given a nomenclature called incentive. The maximization of efficiency was made synonymous to the maximization of profit

Given the present situation, unless we do something to put a stop to the madness of privatizing the power industry, we are bound to end up having an unimaginable power crisis that could unavoidably plunge the country into the abyss of economic "darkness" that could even trigger widespread unrest.

Thus, when the government let go the cascading demand to privatize and deregulate the power industry, no doubt gargantuan profit was no sooner realized. The spirited drive for efficiency by the owners, operators, and all those involved in the power industry emerged as new class of barons called "power industry barons."

More than that, government's patronage to their policy opened the Pandora's Box of the evils inherent in that system. They failed to foresee that deregulation and privatization were self-defeating propositions, for they will inevitably usher in cut-throat competition; result in the over-supply of energy more than the requirement by a given franchise area; and could result in price manipulation amplified by the pricing in the Wholesale Electricity Spot Market. All that has led to the unmitigated upward movement in the price of electricity.

Investment itself has been affected, with some even asking the government to pitch in. The symptoms are now written on the wall by the long hours of brownout, while the suffering public is conscious that power outage is being carried out with seeming impunity to pressure on the government to give in to their demands.

The worse thing about the present power crisis is that neither the producers of electricity nor the government, standing as wholly behind the policy, does not have the capacity and the political will to reduce the cost of electricity. The whole issue now revolves around the urgency to promote efficiency while allowing the producers of electricity to continue to rake in their huge profit. They stick to their old formula by insisting in privatizing the remaining state-owned power plants because they are in fact against any form of competition. They already commingled and irreversibly integrated their high cost of production that to unbundle them now is to wreck the intricate system that generated huge profit in the name of efficiency.

They would rather allow the people to bear the cost and suffer than to reduce the cost of electricity which they cannot do because of our inflation-based economy. That becomes a serious problem because the malaise is affecting the cost of investment. The negative effect of glut in the supply of power is seriously jeopardizing the cost to produce per kilowatt hour that is debilitating to many of the country's downstream industry, notwithstanding that many of them survive on a marginal profit basis.

This explains why the advocates of privatization and deregulation are running out of logic; it now taps the government as their own counsel – that the final solution to the problem is the elimination of inter-industry competition represented by the competition put up by the remaining state-owned generation plants operated by the National Power Corporation.

They want state-owned power plants to be finally eased out despite the truth that none of their promises was fulfilled, and on the contrary the country today stands as the highest in terms of cost in electricity. Because the public have become suspicious, they tapped the government of President Aquino to join them in blackmailing the consumers. As Mr. Aquino ignorantly stressed, the consumers should learn how to pay the cost, forgetting that just like the producers of electricity they too suffer from losses by the inability to pay.

• rodkap@yahoo.com.ph

‘Mindanao Action Party’: A political jihad

DIE HARD III
Herman Tiu Laurel
4/20/2012



The final insult to our Mindanaoan brothers and sisters who have politely raised their appeal the past few months to the national political authorities for action on the Mindanao power crisis came via the cancellation of the April 19, 2012 meet by the Joint Congressional Power Commission (JCPC), the body tasked to oversee the implementation of the power privatization law known as the Electric Power Industry Reform Act (Epira).

The cancellation, according to its chairman, Sen. Serge Osmeña, was due to the absence of his co-chairman, Rep. Henedina Abad, as well as those of other members who could not confirm their attendance. Given these characters’ track record, the past 10 years of sitting on urgent issues in their respective energy committees, “postponement” is likely a deliberate delay in furtherance of their covert pressure tactics.

While Osmeña takes his easy time, the JCPC is keeping roughly 30 million Mindanaoans waiting in darkness. This is clearly the reason for some Mindanaoans to now take matters into their own hands.

Early Wednesday morning we got an urgent call from veteran political warrior Homobono Adaza. In the midst of handling countless legal cases, from the power plunder and the Corona impeachment to several political-legal-economic issues in tandem with lawyer Alan Paguia, Adaza has decided to spring into action in response to the blatant imperialism of Manila’s elite politicians against the people of Mindanao.

The power summit in Davao where approximately a thousand people from all over Mindanao attended, hoping to have a dialog with BS Aquino III, instead became a forum where they were treated to an imperial dressing down and ordered to “pay up or face blackouts,” and told further to accept the privatization of Mindanao’s “crown jewel,” the Agus-Pulangi hydroelectric system.

Then, as if to rub salt on an open wound, Mindanaoans were made to expect some dialog later in the JCPC, only to be so rudely cancelled until the next whim of the man who calls them “spoiled” brats.

Apparently, the evening before, Adaza was already in consultation with numerous Mindanao citizens and political leaders where a consensus was reached that Mindanao should organize again — as it did during the long Marcos period — a political party of its own to redress the grievous shortchanging it has been getting from Manila’s “elite imperialists.” Adaza certainly has had experience on this as he was one of the major organizers of the victorious Mindanao Alliance in the 1970s that catapulted him, Reuben Canoy, and Nene Pimentel to national prominence.

Adaza’s brief on Mindanao’s current predicament reads like an oft-repeated wish list: First, Mindanao has not had sufficient representation in the seat of national political policy, the Senate; second, the Epira issue needs strong Mindanao representation that will not only “appeal” but take decisive political action to repair the damage that has been done; third, as a counter-measure, Mindanao should win a fair share of the Senate seats, at least four of 12, up for grabs in 2013.

The call of Adaza for the “Mindanao Action Party” (MAP) will ring loud and clear to all Mindanaoans; thus, Luzon and the Visayas must support this for their own sake.

We have seen the fighting spirit of our Mindanao brothers, unspoiled by Manila’s politics and pampering which the regional and provincial politicians in the political center have fallen for. Though we don’t know yet if Adaza himself will be a MAP candidate, we hope that more like him from Mindanao will pick up the mantle of being the people’s champion in the coming senatorial elections to show these corrupted national leaders what it means to fight for the people’s cause.

The fundamental strategy I surmise is to consolidate Mindanao’s votes which would be around 11 million today, enough to put MAP’s candidates into the last four slots of the Senate. In 2010, the 12th, and tail-ender TG Guingona, who now sits as a Lopez backstop next to Osmeña, got 9.6 million votes.

Mindanao’s fight now is a national fight, which Mindanao has actually carried on where Luzon and the Visayas found themselves exhausted after 10 years of protesting the Epira. Mindanao is also the final frontier for the foreign and local power oligarchs to subdue, just as it was when the Spaniards and Americans tried to pacify the whole country for their colonial domination but were stopped in Mindanao.

The power oligarchs, through the mouth of Serge Osmeña, are saying they want to raise the power rates in Mindanao to the level of Cagayan de Oro of P7.50 per kilowatt-hour (kWh) at this time, which is $0.18 per kWh and higher than even Hong Kong’s $0.14 per kWh. Even if that rate were lower than Manila’s or the national average of $0.23 per kWh today, the aim of the oligarchs is to eventually even all this out to the Manila and national average. These have all been stated in so many words by Energy Secretary Rene Almendras and Serge Osmeña; and with the lopsided Performance Based Regulation (PBR) scheme, rates will definitely go up every three years.

The Mindanao and national struggle to restore truthful, just, and fair electricity rates in generation, transmission, and distribution, as well as the sector’s ownership structure and laws, epitomize everything that has gone wrong with the country under the present “plutonomy,” an economy controlled by plutocrats who also control the present crop of political players ushered in by Edsa I and II’s Yellow mobs. It’s time for a national political “jihad,” a holy war of the people, against these plutocrats and corrupt politicians.

(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 “Electricity and fuel price crisis: Solutions” with consumer advocate Dr. Amanda Cruz and Wilson Fortaleza of FDC; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Surviving the Titanic and the North Korean Rocket

YESTERDAY, TODAY & TOMORROW
Linggoy Alcuaz
4/16-22/2012



For the past few weeks we have had a crescendo of panic and over acting over the North Korean rocket launch. While North Korea claimed that they were just launching a satellite, the United States and its allies were suspecting and accusing North Korea of developing an offensive ballistic missile.

In trying to avoid South Korean and Japanese airspace, the track of the rocket would pass over the East Philippine Sea close to the Eastern side of Luzon. Actually thousands of satellites, rockets and pieces of space debris are constantly orbiting around the earth all the time.

However, these are already orbiting and not yet falling down to earth. However, in order to send something into orbit at the present level of technology, a series of rocket boosters that detach and fall back to earth are employed. It was the third stage that was supposed to fall east of the Philippine island of Luzon.

However, the North Korean rocket malfunctioned soon after launch and did not get anywhere close to us. The hullabaloo and panic caused more harm to our wellbeing than the rocket that we feared. It was during the over acting in anticipation of the rocket launch that I recalled the natural and man-made disasters that we had not properly prepared for. Some of these had caused so much loss of life.

One glaring example was the collision and sinking of Sulpicio Lines’ Dona Paz and an oil tanker between Batangas, Romblon and Mindoro in December 1987. I was the Commissioner of the National Telecommunications Commission at that time. We monitored the compliance by civilian aircraft and ships of laws and regulations pertaining to radio communications and safety.

One of the important regulations then was that ships at sea should monitor the emergency frequency every other fifteen minutes. However, on an overnight trip to Cebu City from Manila, I could not raise any response on the standard Maritime emergency frequency. When I simulated an Emergency Call on board an aircraft over the Visayas, I got a response from a Quantas plane but none from any Filipino aircraft.

When the Titanic was sinking in the freezing North Atlantic, the radio operator of the nearest ship, the Californian had turned off his radio and had gone to sleep. The next nearest ship was the Carpathia but it took her almost till morning to get to the survivors in the lifeboats. In the freezing waters, a person would die from hypothermia in minutes,

Yesterday was the one hundredth anniversary of the sinking of the RMS Titanic. The Titanic was the biggest and newest passenger liner in the world. She was owned by the White Star Line (the competitor of the Cunard Line. Both were British.). She was the middle ship in a class of three: the Olympic, Titanic and Britannic. She was built by Harland and Wolf in the City of Belfast in the Island of Ireland which was part of the United Kingdom.

She was on her maiden voyage and had just been completed. On April 10, 1912, she left Southampton for Cherbourg in France, Queenstown in Ireland and New York. Just before midnight on April 14, 2012, she hit an iceberg south of Newfoundland. She sank in two hours and forty minutes. She only had twenty lifeboats. They could only carry 1,178 passengers and crew out of 2,224 on board. Following is an account from Wikipedia:

“At 11.40 pm (ship's time), lookout Frederick Fleet spotted an iceberg immediately ahead of Titanic and alerted the bridge. First Officer William Murdoch ordered the ship to be steered around the obstacle and the engines to be put in reverse, but it was too late; the starboard side of Titanic struck the iceberg, creating a series of holes below the waterline. Five of the ship's watertight compartments were breached. It soon became clear that the ship was doomed, as she could not survive more than four compartments being flooded. Titanic began sinking bow-first, with water spilling from compartment to compartment as her angle in the water became steeper.

“Those aboard Titanic were ill-prepared for such an emergency. The ship's lifeboats only had enough space to carry about half of those on board; if the ship had carried its full complement, only about a third could have been accommodated in the lifeboats. The crew had not been trained adequately in carrying out an evacuation. The officers did not know how many they could safely put aboard the lifeboats and launched many of them barely half-full. Third-class passengers were largely left to fend for themselves, causing many of them to become trapped below decks as the ship filled with water. A "women and children first" protocol was generally followed for the loading of the lifeboats and most of the male passengers and crew were left aboard.

“Two hours and forty minutes after Titanic struck the iceberg, her rate of sinking suddenly increased as her forward deck dipped underwater and the sea poured in through open hatches and grates. As her unsupported stern rose out of the water, exposing the propellers, the ship split apart between the third and fourth funnels due to the immense strain on the keel. The stern remained afloat for a few minutes longer, rising to a nearly vertical angle with hundreds of people still clinging to it. At 2.20 am, it sank, breaking loose from the bow section. The remaining passengers and crew were plunged into lethally cold water with a temperature of only 28 °F (−2 °C). Almost all of those in the water died of hypothermia or cardiac arrest within minutes or drowned. Only 13 of them were helped into the lifeboats though these had room for almost 500 more occupants.

“Distress signals were sent by wireless, rockets and lamp, but none of the ships that responded were near enough to reach her before she sank. A nearby ship, the Californian, which was the last to have been in contact with her before the collision, saw her flares but failed to assist. Around 4 am, RMS Carpathia arrived on the scene in response to Titanic's earlier distress calls. 710 people survived the disaster and were conveyed by Carpathia to New York, Titanic's original destination, while 1,517 people lost their lives.”