Kudos to US energy firm

Manila Bulletin

By DR. BERNARDO M. VILLEGAS

July 22, 2011, 1:04am

MANILA, Philippines — A very strong argument to open up more strategic sectors in the Philippines to foreign enterprises is the recent announcement that AES Philippines, a subsidiary of one of the largest energy firms in the United States--the AES Corporation--won the 2011 Edison Award, the electric power industry's most prestigious accolade.

The Edison Award is presented annually by the Edison Electric Institute (EEI), an association of US shareholder-owned electric companies.  It honors "distinguished leadership, innovation, and contribution to the advancement of the electric industry for the benefit of all."  Last year, for example, one of the awardees was the British Columbia Transmission Corp (BCTC) in tandem with Hydro-Quebec.

The citation should serve as an inspiration to our own national transmission grid that was just recently privatized.  By adopting new methods and tools for transmission line maintenance, BCTC was able to deliver real improvements in system inspection, maintenance, and safety.

Hydro-Quebec developed an innovative transmission line inspection robot, LineScout Technology (LST), dramatically increasing the ability for live line inspections and providing increased safety for inspection personnel.

The innovation in technology offered a new delivering platform and opportunities for deploying advance inspection and maintenance technologies and thus reduced costs, improving reliability and increasing safety for utilities throughout North America and the world.

AES Philippines received the Edison Award in the international category for its successful rehabilitation of the power plant in Masinloc which it purchased from the government in 2008.

By bringing it up to its rated capacity of 600 megawatt, its foreign management working with highly motivated and talented Filipino managers, technicians, and workers has contributed significantly to normalizing the electricity supply in the Luzon grid.

The AES Corporation has been so encouraged by its successful rehabilitation of the Masinloc plant that it is seriously considering investing in an additional capacity of 600 MW in the medium term.

The award was prompted by the comprehensive rehabilitation program through which the company restored the plant's mechanical infrastructure and improved boiler efficiency and environmental controls, serving as a model of excellence to local power plants.

As a result of these innovations, AES Philippines safely increased the plant's efficiency by 13% and increased its output by 31%, while lowering emissions levels so that they are in compliance with World Bank standards.  As a member of the AES Board of Advisors, I am also very familiar with the emphasis of top management on developing a corporate culture that is steeped in a concern for safety.

The company has spared no efforts in implementing an extensive training program and introducing an Achievement of Excellence Award, which recognizes outstanding employee safety performance.

In receiving the award, the country manager of AES Philippines--Andy Horrocks--attributed the excellent results of the rehabilitation work to the world-class Filipino team with whom the foreign managers worked:  "The award is a testament to our local team's professionalism, passion for excellence, and determination to succeed.

We look forward to continuing to provide safe and reliable energy to the Philippines and contributing to the economic development of the country."

The case of AES Philippines is a testament to what can be achieved by opening up more and more of our economic sectors to foreign ownership and management.  It is about time that we examine more closely the many restrictions that our very Constitution and laws enacted by the Philippine Congress impose on foreign investments.

A more liberal attitude towards foreign investments can challenge their local counterparts to be more productive and break down the many cartels and oligopolies that still exist in many industries.  It is a shame that our peers in Southeast Asia like Indonesia and Vietnam can attract FDIs three to four times more than the Philippines.

If we get excellent corporations like AES in many of our strategic economic sectors, we can accelerate our GDP growth rate from the mediocre 4 to 5% over the last three decades to 7 to 10% in the coming ten to twenty years.

For comments, my e-mail address is bvillegas@uap.edu.ph.