Law mulled sparing power plants from LGU coverage

Manila Times.net

THE government will push for a new law to address investors’ concerns over land use in the country, according to a Department of Energy (DOE) official.

Undersecretary Josefina Patricia Asirit said the country’s economic managers are keen on institutionalizing and expanding Executive Order (EO) 72 to encourage investments.

”There are issues surrounding this EO that are more of political so they would want something big like transforming it into a law,” she said, citing the preponderance of exiting laws on real estate taxes over Philippine Economic Zone Authority rules.

The DOE official said the government would call on legislators for such a piece of law.

Under EO 72, local government units (LGUs) have the authority over land use in their areas in conformity with standards and guidelines set by the Housing and Land Use Regulatory Board (HLURB).

The HLURB, however, “shall issue locational clearances for projects considered to be of vital and national or regional economic or environmental significance. Unless otherwise declared by the [National Economic Development Authority] board, all projects shall be presumed locally-significant.”

The DOE had been pushing the government to invoke this phrase in the EO to declare vital energy installations across the country as projects of national significance to shield them from LGUs.

It would be recalled that the country’s largest oil warehouse, the Pandacan depot, was nearly given the boot last year after the local government of Manila reclassified the the area.

The facility serves half of the country’s fuel needs including 1,800 retail stations in Metro Manila and outlying provinces; 70 percent of the shipping industry’s fuel requirements; and 90 percent of lubricants and 75 percent of aviation fuel nationwide.

Aside from the storage facility, power plant operators were also spooked by real property taxes being claimed by their host LGUs.

Earlier, the Quezon provincial government threatened to auction off the 600-megawatt Pagbilao coal-fired power plant for failure to pay P6.1 billion in real property taxes from 1997 to 2010.

The facility is operated by TeaM Energy Corp. of Japan under a build-operate-transfer agreement with state-owned National Power Corp., which assumed all tax obligations.

Malacanang, however, issued Executive Order 27, reducing and condoning “real property taxes and interest/penalties assessed on the power generation facilities of independent power producers under build-operate-transfer contracts with government-owned or controlled-corporations in the province of Quezon.”EUAN PAULO C. AÑONUEVO