Business Mirror
Published on Sunday, 18 August 2013 19:52 Written by Manly M. Ugalde / Correspondent
LEGAZPI CITY—Barring a court order, San Miguel Corp. (SMC) will finally take over the troubled and debt-ridden Albay Electric Cooperative (Aleco) after three other interested buyers withdrew during the bidding scheduled on August 7, said Albay Gov. Joey Sarte Salceda.
The country’s third-biggest electric cooperative and touted as among the 10 worst, Aleco’s P4-billion debt will be shouldered by SMC, said Salceda, adding that the Aleco bids and awards committee will announce its decision during the cooperative’s general assembly on August 21.
On September 14 the National Electrification Administration (NEA) would conduct a referendum from consumers to choose whether to push privatization as proposed by the NEA or the cooperative-to-cooperative operation proposed by the Aleco Multi-Sectoral Stakeholders Organization (Amsso).
Salceda said the SMC will immediately take over Aleco’s operation a day after the scheduled referendum, saying consumers will certainly choose privatization.
The three giant firms that withdrew in the race were Meralco, the Aboitiz Group which owns the Tiwi Geothermal Power in Tiwi town in Albay, and the Lopez Group which owns the Bac-Man Geothermal in Manito town also in Albay.
Salceda who was silent for almost three years over the Aleco issue finally confirmed he had strongly supported the privatization of the scandal-ridden Aleco as early as 2010. In early 2011 NEA took over management control of Aleco and pushed for its privatization the legality of which, however, was questioned before the Regional Trial Court in Legazpi filed by Amsso early in May.
Amsso president lawyer Bartolome Rayco said the Aleco Employees Union and his group are waiting for a court resolution against the privatization after the 20-day temporary restraining order issued by the court had expired on June 10.
Rayco said Amsso and the Aleco Employees Union expressed fear that the NEA, Salceda and other support agencies pushing for privatization will utilize their resources to buy consumers votes.
Amsso officials criticized the NEA-Aleco move to award the concession to SMC as the winning bidder on Wednesday despite its called referendum on September 14. Rayco questioned if that meant the referendum results have already been ante-counted in favor of privatization.
In a forum held here on Thursday last week presided by Energy Secretary Jericho L. Petilla, it was announced that after evaluation of the bid proposal submitted during the August 7 bidding, the NEA has called for the special general assembly to announce the winning firm which was left to SMC being the lone bidder.
Petilla said Meralco withdrew in the race saying they would buy everything but not a loan obligation, referring to the P4-billion Aleco debt, while Aboitiz rejected embracing the 11 percent of the 24 percent high-system losses during the first three years as embodied in the Term of Reference.
Salceda said whether Aleco would be managed by a cooperative proposed by Amsso, “as a governor I am strongly supporting the ongoing NEA-managed process of privatization of Aleco management to achieve our second goal after power restoration last July 31 to ensure continuous supply of power.”
Asked about the consumers’ fear of a subsequent power rate increase once Aleco is privatized, Salceda said he thinks Albay consumers may get any power rate increase in three years under SMC.
SMC bids representatives Avelino Cedo and Jose Valte said SMC would initially infuse a total of P510 million for the rehabilitation of Aleco estimated at P250 million, and the P260 million for employees who would be terminated or retiring. They said Aleco’s current employee complement would be drastically reduced.
Aleco suffered 28 hours without power after the National Grid Corp. of the Philippines cut its power supply on July 30 for non-payment of electricity bills from the Philippine Electric Market Corp. (PEMC). PEMC asked Aleco to pay only the current bills for June amounting to P68 million setting aside a delinquent account of almost P1.2 billion in electricity bills. Aleco, however, could not come up with the entire amount.
With the partial payment of P47 million, however, the Department of Energy (DOE) ordered Aleco’s reconnection after 28 hours but not without Legazpi Mayor Noel Rosal’s giving the guarantee to deliver the balance in 24 hours. The DOE had also set a condition for Aleco to cut power of the first 100 top delinquent big users which owed Aleco some P15 million.
In early 2011, the NEA took over management control of Aleco again with lawyer Veronica Briones from the Camarines Sur 11 Electric Cooperative designated project supervisor. Before accepting the management takeover, however, the NEA and the Department of Energy had set a condition that the entire Aleco board resigns.
With the resignation of the Aleco board, the NEA created its own Aleco interim board headed by Legazpi Diocese Bishop Joel Baylon as chairman which crafted the cooperative’s privatization. source
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