By: Delfin T. Mallari Jr. 12:58 AM August 9th, 2016
LUCENA CITY―The Quezon provincial
government is bent on putting the 735-megawatt coal-fired thermal power plant
in Pagbilao town on the auction block to collect the P690-million real property
tax that it said is due the local government.
“We’re seriously thinking of putting
all taxable properties into public auction. We’re now studying all legal
issues,” Board Member Ferdinand Talabong said last week.
Talabong, a lawyer, said the
provincial government would seek the Supreme Court’s opinion on the
constitutionality of Executive Orders No. 27 and 173 issued by then President
Benigno Aquino III relating to tax issues involving the plant.
“In order to clarify whether or not
the tax condonation made by former President Aquino is correct, just and
lawful, it is for the best interest of the people of our province to bring the
issue to the Supreme Court,” he said.
Team Energy (TE), the operator of
the Pagbilao plant, said the issue on the settlement of real property tax is a
matter between the national government on one hand, and the provincial and
municipal governments on the other.
“It is clearly stated in our Energy
Conversion Agreement (ECA) with the … government in 1991 that said taxes are to
the account of the national government,” Froilan Gregory Romualdez III, TE head
of external affairs, said in a statement.
TE is a joint venture of Japanese
firms Tokyo Electric Power Co. and Marubeni Corp. Aside from the Pagbilao
plant, it operates other generating facilities acquired from the United
States-based Mirant Corp. in 2007.
According to the company’s website,
the 735-MW plant in Pagbilao can produce at most 16.8 million kilowatt hours
(kWh) of electricity daily or over 6 billion kWh annually. It is undergoing
expansion to generate an additional 420 MW next year.
Romualdez said that while TE is not
a direct party to the case, the firm continues to work with local officials and
national agencies in addressing the matter.
“We deeply value our relationship
with the provincial and local government, and through constant dialogue and
coordination, we remain optimistic that this matter shall be resolved to the
satisfaction of all parties,” he said.
The provincial government’s plan to
auction off the plant may meet strong opposition from the national government
due to the facility’s contribution to supply the power needs in Luzon, Talabong
said.
“We appeal to President Duterte not
to condone the plant’s back taxes. He should not repeat what former President
Aquino did during his term,” he said.
In 2010, the province tried but
failed to collect P6.1 billion in back taxes from TE despite a Supreme Court
decision favoring the collection by the Quezon and Pagbilao governments.
Aquino issued EO 27 in February 2011
that stopped the provincial government from collecting the unpaid real property
taxes. He had said he could not allow local governments to collect back taxes
from independent power producers (IPPs) because it would threaten the financial
stability of the government and the stability of energy prices.
The forcible collection of taxes by
local government, he said, could also increase power costs.
In 2014, Aquino issued EO 173 that
reduced the real property taxes earlier assessed on facilities of IPPs dealing
with government-owned or controlled corporations in a bid to prevent an
increase in power rates.
To compensate for the loss, Aquino
offered to provide P1.5 billion worth of development projects and programs.
But Quezon officials said the
provincial government received only P1.2 billion worth of projects, including
the P750-million funding assistance from Malacañang in 2011 from the
Disbursement Acceleration Program (DAP). The Supreme Court, in 2014, declared
parts of DAP unconstitutional.
Talabong blamed the EOs for the loss
of an estimated P5 billion, representing 85 percent of the assessed real
property taxes, condoned by Aquino.
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