Albay electric cooperative to go private

Business Mirror

Published on Tuesday, 16 April 2013 19:15

Written by Manly M. Ugalde / Correspondent

LEGAZPI CITY—It’s final.

The bankrupt Albay Electric Cooperative (Aleco) will become private, even if only two giant firms attended a pre-bid conference held here on Monday to try to outbid each other toward owning the country’s third-biggest electric cooperative touted as the third worst.

This developed even as the National Electrification Administration (NEA) refused to entertain other proposals from stakeholders and interested sectors on the best option to use to rehabilitate the bankrupt cooperative.

The NEA had taken over control of Aleco in February 2011 in an effort to save the cooperative from total collapse. A pre-condition for the NEA takeover was the resignation of the entire Aleco board of directors that followed the creation of the Crisis Management Committee headed by Bishop Joel Baylon of the Diocese of Albay.

As the pre-bid conference was in progress, some 500 people held a protest rally that started in front of the Diocese of Legazpi chancery here and proceded to the Aleco compound. Armed security guards were on hand to prevent the protesters from entering the compound.

Bartolome Rayco of the multisectoral stakeholders’ group who is also the lawyer of the Aleco Employees Union that originally opposed the co-op’s privatization said the pre-bid conference was secretly held at the Pepperland Hotel near the Legazpi airport with San Miguel Corp. and the Aboitiz Group the only bidders interested to buy Aleco.

The power co-op is said to be indebted of close to P4 billion.

On Saturday, the Justice Retribution Restitution Coalition (JRRC) headed by Melencio Romano met with the local press and reiterated its original demand for a one-on-one public debate.

There was no word from lawyer Veronica Briones, the NEA- designated project supervisor for Aleco.

The protesters also blamed Bishop Baylon for joining NEA’s efforts to privatize Aleco in Baylon capacity as acting chairman of the Aleco interim board of directors which was formed following the abolition of the Crisis Management Committee early last year.

Bishop Baylon said privatization was the only hope seen to give life to Aleco, adding this belief was based on a study.

Aleco records showed its management was alternately handled by the Aleco board of directors, the NEA, and twice by the Catholic Church, which all reportedly failed to neutralize the severe corruption that hounded the cooperative during the past 30 years.

Rayco said the multi-sector stakeholders group had proposed for a co-op-to-co-op operation with the Benguet Electric Cooperative as partner. The Church had earlier vouched for the proposal but opted later to abandon the proposal in favor of the NEA’s firm privatization stand.

Rayco said the Development Bank of the Philippines had offered Aleco a loan of P1 billion for its co-op-to-co-op proposal but this was not entertained by Briones, the NEA’s front person for the cooperative’s privatization.

The JRRCR opposed the co-op-to-co-op proposal, saying the JRRC is for the retention of Aleco as a cooperative.

Both JRRC and the multi-sectoral stakeholders group feared that privatization would eventually raise Albay’s power rate.

Albay Third District Rep. Fernando Gonzales said the issue to privatize or not is now. He said he, along with other congressmen and many local officials, favor privatization because that is the only way to save Aleco which suffered a very high system loss of 24 percent over the years.

Last December, Aleco reportedly caught five firms cheating on their power use; these were consequently penalized P35 million. Two of the firms were reportedly owned by a congressman and a party-list congressman who, however, were not charged in court, said Aleco General Manager Rey Reverente.   source