Roxas cites security issues in Chinese’ control of national grid

MANILA, Philippines – Citing security issues, Interior and Local Government Secretary Manuel Roxas II called on China to turn over control and transfer the promised technology in the country’s main power transmission company to Filipinos.

In a press briefing on Tuesday, September 25, Roxas said he discussed with Chinese Foreign Affairs Vice Minister Fu Ying during a September 21 meeting the issues of control and security regarding the National Grid Corp. of the Philippines (NGCP).

NGCP is the privatized firm that handles the power “superhighway” that brings high-voltage electricity generated in various power plants in the country to power retailers, like Meralco.

Roxas said he told Fu he is “not comfortable” that foreigners are in charge of the electric grid.

“Will there be a black out or not? Will there be a rolling [blackout] or will there be insufficient supply? Who will have brownouts? Who will be sacrificed? It will be more comfortable if Filipinos will handle those decisions,” Roxas said.

His statement about the Chinese’s 40% stake in NGCP brought out into the open concerns that have been discussed only in coffee shops, or by industry players who have tried to play down the boardroom battle for control.

Security

Roxas said that he told Fu the Filipino government’s concerns about the NGCP after meeting with Chinese Vice President Xi Jinping on the side of the China-ASEAN Expo in Nanning.

In particular, he informed Fu that State Grid has yet to comply with a provision in its contract mandating the Chinese to transfer its technology by training Filipinos to handle the grid.

Roxas said that Fu understood the government’s sentiments, giving as example the same concerns that the Chinese may raise if Filipinos would ever control the power grid in China.

Roxas said that Fu also promised to consult his peers in the government regarding the request of the Department of Energy to install CCTV cameras at the NGCP to ensure the Filipinos could monitor how the grid is being controlled.

He also stressed the Philippines welcomed the Chinese investment but stressed that all rules must be followed.

Filipino, Chinese owners

The state-owned State Grid of China Corp. have a minority 40% stake in NGCP that it bought in 2009 after the government decided to break apart and sell the inefficient and debt-laden state power assets.

NGCP took over the assets of then National Transmission Company (Transco) but not its liabilities.

When businessman Enrique Razon was still an NGCP shareholder via Monte Oro Grid Resources Corp, the boardroom face-offs with State Grid officials were legendary.

Razon later sold Monte Oro’s 30% stake in NGCP to OneTaipan Holdings Corp, a company control by Henry Sy Jr., the son and namesake of the Philippines richest man, himself with Chinese roots.

The Coyiuto group’s Calaca High Power Corp. holds the other 30% shares.

The NGCP consortium has a 25-year concession to operate and manage the national power transmission system. The contract is renewable for another 25 years. – Rappler.com