Manila Bulletin
by Myrna Velasco
August 25, 2014
The Power Sector Assets and Liabilities Management Corporation (PSALM) will be elevating to the Department of Justice (DOE) the dispute on its P5.6 billion worth of receivables on the Ilijan plant from South Premiere Power Corporation (SPPC), a unit of San Miguel Energy Corporation.
“On Ilijan (receivables), we will request DOJ’s further legal advice on this,” PSALM President Emmanuel R. Ledesma Jr. has noted in a text message.
The SPPC unit of San Miguel was the anointed independent power producer administrator (IPPA) for the 1,200-MW Ilijan natural gas-fired power facility in the privatization process undertaken by PSALM on its supply contract.
As culled from documents, SPPC owes PSALM P5.6 billion of “disputed generation payments” under the IPPA arrangement for the Iljan plant.
In the state-run power firm’s statement of account, the total booked receivables from SPPC had been placed at P79.8 billion, but the latter only settled P74.2 billion – with the rest subject to dispute resolution.
PSALM first sought an opinion from the Office of the Government Corporate Counsel (OGCC) for the interpretation of some of the provisions of its IPPA agreement with SPPC.
The OGCC opinion stipulated that the parties concerned must concede to a proposal, “depending on the threshold amount or variables determined on PSALM’s manual of approvals.”
It was further gathered though that in Ledesma’s letter to SPPC last October, 2013, he already conceded to a settlement of P1.7 billion. Nevertheless, that did not have the requisite PSALM board approval.
The PSALM’s Manual of Approvals primarily stated that “cancellation or write-off shall be subject to prior evaluation by the Internal Audit Department for endorsement by the President to the PSALM Board.”
And since the concerns were not resolved from that step, PSALM indicated that it will be taking another legal recourse via the justice department. source
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