Thursday, December 5, 2019

DOE says audit will ease fears on NGCP


By BusinessMirror - By Lenie Lectura & Butch Fernandez

THE Department of Energy (DOE) on Monday said it is pushing for an audit of the transmission grid, as Senate Energy panel chief, Sen. Sherwin Gatchalian, targeted the holding of an inquiry by mid-December, amid national security questions surrounding the National Grid Corp. of the Philippines (NGCP) and its partner State Grid Corp. of China (SGCC).
Only after the audit can the Philippine government put to rest issues on such national security concerns, the DOE said.
“The threat that people are talking about, to put a closure to that, and for government to put up measures that we need to protect the republic and the people, let [inspection] be done so that all our worries can be gone. That can only be done by audit, inspection. If there is any perceived threat—real or imaginary—the government must be ready for any eventuality and we can do that only if NGCP cooperates,” said Energy Secretary Alfonso Cusi at a news conference Monday morning.
During the press conference, DOE and National Transmission Corp. (TransCo) officials said they would discuss among themselves how to go about inspecting NGCP’s facilities.
Later in the day, newly appointed DOE Undersecretary Emmanuel Juaneza went to NGCP’s office in Quezon City. He reportedly asked NGCP for feedback, by Tuesday, with regards to a supposed audit agreement between NGCP and the government.
Asked for comment, NGCP Spokesman Atty. Cynthia Alabanza said, “Usec. Juaneza handed over a letter, which NGCP has yet to review as against the concession agreement. We invited him to view our systems operations, but he politely declined, saying that he does not want to disturb our operations especially during the impending landfall of Typhoon Tisoy.”
Juaneza, who was introduced by Cusi on Monday, has been tasked  “to coordinate with TransCo for the inspection of the facilities that we need to do to make sure that the interest of the republic is protected.”
“He is my representative in TransCo board. He is a mechanical engineer.  He has background in power plants here and abroad,” said Cusi.
For his part, Juaneza said he has over 30 years of experience in the power industry here and abroad. He used to be the plant manager of a geothermal power facility in Mindanao from 1996 to 2001. From then on, he said he worked “in different parts of the world.”

40-percent stake

The SGCC has a 40-percent stake in NGCP, which took over the management and operation of the Philippines’s power grid since 2009. TransCo still owns the assets.
China’s foreign ministry spokesman said last week that apprehensions that Beijing, through SGCC, could sabotage Philippine interests by remotely cutting off its power system were groundless. Like other state-owned firms in China, SGCC always strives to serve its business clients in excellent fashion, the ministry added.
In a statement last week, DOE said: “Given that there are aspects in the existing Franchise Agreement with the NGCP that seem inimical to the best interests of the national government and, more importantly, the Filipino people, both the DOE and TransCo continue to call for, and are fully supportive of the Senate’s interest to take a closer look at the administrative, operational, and procedural structures existing within the NGCP.
“We consider the Senate hearings as a positive development toward the long overdue and much needed audit of NGCP, as well as the comprehensive reexamination of the Franchise Agreement, which is part of the Presidential directive to review all government contracts that appear to be onerous. These steps would facilitate the introduction of all necessary amendments to uphold our national security and the welfare of our citizens and consumers.”

Senate inquiry

The chairman of Senate Committee on Energy left the door open to an inquiry in aid of crafting remedial legislation to address possible gaps in the existing NGCP deal.
Sen. Sherwin Gatchalian indicated Monday senators are keen to hear details of the China power deal.
Lawmakers, he said, need to assess its implications on national interest, as well as determine the need for legislative action. “It’s normal to be paranoid in discussions of national security. We need to look at all possibilities because anything can happen in the future. We can say now that such a thing is impossible, or that it won’t be done to us, but we cannot say what happens next year, 10 years from now, or 20 years from now,” Gatchalian said in a mix of English and Filipino.
Reminded that the Chinese government had conveyed its assurance to President Duterte that Beijing will not sabotage the power grid, Gatchalian said that while the assurance was good, he will listen primarily to only two people: “first, the national security adviser because this is a national security concern…and, second, the DOE secretary because this involves power and electricity for day-to-day operations.”
He noted that Duterte listens to the National Security Adviser, Hermogenes Esperon, and the DOE chief.
While attending a recent conference of electrical engineers, Gatchalian said he spoke on the sidelines to someone who said the technology to control the transmission system exists. The imperative, he said, is to make sure such is not used as a threat against the country.
While China owns 40 percent of the NGCP, it’s the  local companies that exercise majority control, and “hanggang ownership lang ang state grid ng China [the state grid of China is limited to ownership].”
This means, the senator added, “they should not have anything to do with day-to-day operations. They can give advice. But they cannot touch the system.”
Thus, he said, what is needed is not just a “management audit, or just a financial and legal audit but a technical audit.”

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