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WEDNESDAY, 23 MARCH 2011 21:04 MIA M. GONZALEZ / REPORTER
CAGAYAN DE ORO—President Aquino on Wednesday gave fair warning to Mindanao residents that they may be paying higher electricity rates beginning next year, when the government ends the exemption of Mindanao National Power Corp. plants from privatization.
The President said at the joint Philippine Economic Briefing and Regional Development Council meeting that he made the announcement as he does “not want to lie to anybody, especially to people who I considered my boss.”
He said the Electric Power Industry Reform Act (Epira) exempts Mindanao NPC plants from privatization, which led to a situation where the government subsidized power rates in Mindanao.
“This produced a situation where we kept on selling electricity at about P3 when the actual charge of generation was P5. That, of course, is contributory to debt that is inherited by PSALM [Power Sector Assets and Liabilities Management] and the number is daunting. It is P1 trillion,” he said.
He said the long-term solution is to “encourage the private sector to come in and support the demand in electricity that will come in because of the growth of Mindanao, especially after we conclude the peace agreement.”
Toward that end, he added, “we are working on that. The exemption I understand is finished by this year. I beg for your understanding but it does not make sense to continue producing any product and selling it at a loss to be passed on to other people....And I’m sure you would want to do that,” he said.
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