Posted by: empowerconsumers | November 14, 2007

Broad electricity consumers group call for a halt to Transco privatization

EmPOWER Consumers
Press Release
November 14, 2007

A broad consumer group of electricity users with 40 member-organizations today expressed opposition to the privatization of the National Transmission Corporation (Transco) through a 25-year concession contract. The group called for a halt to the privatization of this crown jewel as the government prepares for the pre-bid conference for TRANSCO on November 15.

EmPOWER Consumers said bidding out the right to operate and maintain the $3-billion Transco, a utility imbued with public interest, poses a threat to the national security as well as the economy with a private company taking hold of all the transmission facilities which provide a highway for the electricity to run throughout the country.

“We can be held hostage by profit-driven private companies once Transco is under their control. The winning bidder of Transco would be holding the switchboard of the entire country and has the power to turn it off at will.  Even Malacañang would be on its knees before Transco’s would-be owners begging for electricity once this happens,” warned the group.

Milo N. Tanchuling, EMPOWER Consumers spokesperson and Freedom from Debt Coalition Secretary General, said that “The private company that would operate and maintain Transco would only be accountable to the owners and not to the public.  It could do whatever it wants with the transmission lines, hold power at source or raise prices exorbitantly to recover costs.“

News accounts showed that the number of bidders pre-qualified to bid for the National Transmission Corp.’s 25-year concession contract has been trimmed down to three.

These include Terna-Rete Elettrica Nazionale S.P.A. of Italy with Two Rivers Holdings Pacific of the Metro Pacific group of businessman Manny Pangilinan; Malaysian group Tenaga Nasional Berhad with Newbridge Asia LLP in partnership with Triratna Holdings; and State Grid of China with Monte Oro Resources.

Tanchuling also berated Jose Ibazeta, president of the Power Sector Assets and Liabilities Management (PSALM) Corp., for his announcement that the bidding of Transco would be done behind closed doors as requested by the bidders to withhold their identity from the public.

“What is more important to PSALM? The interest of the public or of these private bidders.  For a company which earns P15 billion annually and provides the connection between generation and distribution, there is so much public interest at stake that Transco’s bidding could not be done behind closed doors,” said Tanchuling.
He pointed out that holding Transco’s bidding out of public scrutiny violates Art. II, Sec. 28 and Article III, Sec. 7 the Constitution and the Government Procurement Act (RA 9184) which mandates that there must be “transparency in the procurement process” and guarantees “public monitoring” to ensure that the bidding process is done in accordance to the law.

Tanchuling added that he finds no reason for government to lease a very important public utility in our economy which is bringing in the money for government in terms of revenues and exchange it for cash – which will not even be in full contract amount.

He said that bidding out Transco to a private company may help the government in repaying power sector debts, but long-term pain will be experienced with rates expected to go up once the operation of the transmission corporation is privatized.

Further, he noted that the winning bidder of Transco would have clean books as the loans incurred by the company would be absorbed by the government and passed on to the public.

“The Philippines is rich in experience in terms of privatization and we have already witnessed with our very eyes the horrors it brings to us.  We do not expect anything good to happen to this undertaking besides giving the people more reason to castigate the government for its endless miseries,” he said.

Tanchuling reiterated that Transco should remain public to ensure a steady and reliable supply of electricity nationwide, and that all privatization efforts by the government on the power industry should be put to stop. Instead, a thorough assessment of the restructuring and privatization of the power industry has to be undertaken by the government. (30)


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