By Lenie Lectura - June 5, 2019
SAN Miguel Corp. (SMC) President
Ramon S. Ang on Tuesday called the attention of the Power Sector Assets and
Liabilities Management Corp. (PSALM) and the Department of Finance (DoF) which
insist that the conglomerate’s power business settle its alleged debts on its
1,200-megawatt (MW) Ilijan power plant.
“This is bullying. They cannot just
dictate on what works best for them. We have to follow due process,” Ang said.
“Respect public bidding. We won this bidding. Stick to the terms and conditions
of the contract.”
For the DoF, Ang suggested it might
want to tap the consulting services of an expert. “They don’t
understand the power business. They should hire a professional consultant to
advise them. We bought this power plant through public bidding.”
The Finance secretary is the
chairman of the PSALM board.
SMC is reacting to PSALM’s
insistence on pursuing collection efforts against SMC over the Ilijan power
plant, citing they also need to service their own obligations. “If [PSALM]
has mismanagement issues, don’t blame us.”
SMC, through its South Premiere
Power Corp. (SPPC), reiterated it has already paid P289.1 billion or $6.19
billion in various fees as of end April 2019 for the 1,200-MW Ilijan power
facility in Batangas, contrary to recent claims that it owes PSALM P19.75
billion in unpaid dues. PSALM has also already gained P34.75 billion from its
Administration Agreement with SPPC.
With this, Ang said he could not
help but wonder where SPPC’s payment went.
“We are just wondering what PSALM
did with all the money they made out of our administration agreement on Ilijan
since 2010. The public has a right to know; we all have a right to know how
they are running things there,” Ang said.
“These are funds that government
should have put to good use such as vital public services and social programs.”
The company added that the amount it
paid for capacity fees alone, which is equivalent to about $2 billion, is
already enough to pay for the 20-year-old power plant. A brand new plant with
the same capacity could be built for so much less.
SMC, through its power subsidiary
SPPC, filed a case against PSALM in 2015 after it terminated the 1,200-MW
Ilijan IPPA due to differences in computation of generation charges.
SMC, however, recently won against
the government after the Mandaluyong Regional Trial Court denied PSALM’s motion
for reconsideration, saying it found no strong and compelling reason to reverse
its earlier ruling.
Separately, the Supreme Court also
decided in favor of SPPC when PSALM challenged the Court of Appeals’ decision
to affirm the writ of preliminary injuction filed by SPPC with the Mandaluyong
RTC. PSALM, it said, “failed to show that the CA committed a reversible error
in the challenged decision and resolutions as to warrant the exercise of the
court’s discretionary appellate jurisdiction.”
“We continuously honor our
obligations. In return, we only ask that they respect the sanctity of our
agreement,” Ang said.
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