LUCENA CITY, Philippines—Quezon Governor David Suarez on Friday issued an ultimatum to the owner of Team Energy (TE), operator of the 735-megawatt coal-fired thermal power plant: Settle your back taxes or we will be forced to put all plant properties on the auction block.
“The public auction will push through on January 26 as scheduled unless the plant operator settles its tax obligation to Pagbilao local government and the provincial government,” Suarez said in an interview Friday afternoon.
Greggy Romualdez, head of TE’s external affairs department, expressed optimism that the inter-agency committee currently studying the matter would be able to resolve the issue before the auction date.
“In our capacity as plant operator, we have been doing whatever it is we can to help settle the matter,” Romualdez said in a text message to the Inquirer.
Suarez said the TE management has not given the local government any offer that would show their “honest desire” to compensate the province.
“Their first proposal was unacceptable and since then nothing concrete has been offered,” Suarez said referring to the offer submitted by TE management last year.
Federico Puno, TE president and chief executive officer, submitted a proposal and offered P1.1 billion to settle the basic back taxes due the local government that ballooned to P6.1 billion. But the offer was turned down by the Pagbilao and Quezon governments.
According to a source from the provincial government, two big companies have shown interest to join the scheduled bidding for the plant.
To force the issue, the Pagbilao government is also planning not to issue a business permit to the plant operator this year, which would force the company to shut down.
Suarez said he was aware that some national government officials have been conducting dialogues with TE management on how to settle the back taxes due to the local government.
“But we were not even invited to participate. We should be there in the middle of whatever negotiation is going on because the local government is the principal party here,” he said.
Suarez said the plant operator could not escape responsibility for the payment of the back taxes. “The court ruled that the plant should shoulder all taxes due the local government because they were the owner of the properties,” he said.
He maintained that the local government was not a party to the Energy Conversion Agreement between Napocor and plant operator.
Suarez said the money that will be collected from the plant operator will be earmarked for different projects and programs of the local government.
The Quezon provincial treasury is in the red as it has been saddled with more than P740 million in debts left by the past administration of former Governor Rafael Nantes.
Late last month, the Quezon provincial government and the municipality of Pagbilao issued a final notice of delinquency to TE in a bid to collect P6.1-billion real property taxes from 1997 to 2010.
The treasurers of Quezon and Pagbilao warned the plant operator that its failure to settle the tax obligation within 10 days from receipt of the notice would force the local governments to resort to legal actions such as serving of warrant of levy and selling the plant and its properties in a public auction.
The 200-hectare power plant lies at Isla Grande in Barangay Ibabang Polo in Pagbilao.
In an earlier statement, TE management maintained that the tax in question should be addressed to the Napocor and not to the plant operator based on their Energy Conversion Agreement.
Signed in 1991 between Napocor and Mirant Pagbilao Corp., the former operator of the plant, the agreement provided that the state power company would shoulder all the taxes the government may impose on Mirant.
But the Supreme Court, in its final decision in January last year, denied Napocor’s bid to exempt Mirant from over P1.5 billion in real estate taxes from 1997 to 2000 that Pagbilao was trying to collect from it.
“The public auction will push through on January 26 as scheduled unless the plant operator settles its tax obligation to Pagbilao local government and the provincial government,” Suarez said in an interview Friday afternoon.
Greggy Romualdez, head of TE’s external affairs department, expressed optimism that the inter-agency committee currently studying the matter would be able to resolve the issue before the auction date.
“In our capacity as plant operator, we have been doing whatever it is we can to help settle the matter,” Romualdez said in a text message to the Inquirer.
Suarez said the TE management has not given the local government any offer that would show their “honest desire” to compensate the province.
“Their first proposal was unacceptable and since then nothing concrete has been offered,” Suarez said referring to the offer submitted by TE management last year.
Federico Puno, TE president and chief executive officer, submitted a proposal and offered P1.1 billion to settle the basic back taxes due the local government that ballooned to P6.1 billion. But the offer was turned down by the Pagbilao and Quezon governments.
According to a source from the provincial government, two big companies have shown interest to join the scheduled bidding for the plant.
To force the issue, the Pagbilao government is also planning not to issue a business permit to the plant operator this year, which would force the company to shut down.
Suarez said he was aware that some national government officials have been conducting dialogues with TE management on how to settle the back taxes due to the local government.
“But we were not even invited to participate. We should be there in the middle of whatever negotiation is going on because the local government is the principal party here,” he said.
Suarez said the plant operator could not escape responsibility for the payment of the back taxes. “The court ruled that the plant should shoulder all taxes due the local government because they were the owner of the properties,” he said.
He maintained that the local government was not a party to the Energy Conversion Agreement between Napocor and plant operator.
Suarez said the money that will be collected from the plant operator will be earmarked for different projects and programs of the local government.
The Quezon provincial treasury is in the red as it has been saddled with more than P740 million in debts left by the past administration of former Governor Rafael Nantes.
Late last month, the Quezon provincial government and the municipality of Pagbilao issued a final notice of delinquency to TE in a bid to collect P6.1-billion real property taxes from 1997 to 2010.
The treasurers of Quezon and Pagbilao warned the plant operator that its failure to settle the tax obligation within 10 days from receipt of the notice would force the local governments to resort to legal actions such as serving of warrant of levy and selling the plant and its properties in a public auction.
The 200-hectare power plant lies at Isla Grande in Barangay Ibabang Polo in Pagbilao.
In an earlier statement, TE management maintained that the tax in question should be addressed to the Napocor and not to the plant operator based on their Energy Conversion Agreement.
Signed in 1991 between Napocor and Mirant Pagbilao Corp., the former operator of the plant, the agreement provided that the state power company would shoulder all the taxes the government may impose on Mirant.
But the Supreme Court, in its final decision in January last year, denied Napocor’s bid to exempt Mirant from over P1.5 billion in real estate taxes from 1997 to 2000 that Pagbilao was trying to collect from it.
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