MVP hits bureaucratic delays in power plant expansion

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MVP hits bureaucratic delays in power plant expansion
Meralco chairman Manuel V. Pangilinan says the Philippines needs to lessen the steps in securing permits for power plant projects

MANILA, Philippines – The tedious bureaucracy in securing approval to build power plants in the country has hindered the Philippines’ bid for power supply sufficiency, which is expected to be magnified by the  power crisis in summer 2015.

Manila Electric Company (Meralco) chairman Manuel V. Pangilinan said the power supply situation should prompt the government to lessen the steps in securing permits for power industry investors.

“We just need a more expeditious process of approving those power plants and an overall policy on which new plants. Is it coal? Gas? Or whatever that government sees prudent for the country so that private sector could be guided,” Pangilinan told reporters at the sidlines of Meralco’s third quarter financial performance briefing on Monday, October 27.

Apart from securing permits, the construction of power plants has been stalled by court-issued suspensions, such as the Subic coal-fired power plant project of Redondo Peninsula Energy (RP Energy) which a court blocked in 2012.

The 600-megawatt (MW) power project began in 2010 and was initiated through the consortium of Meralco PowerGen Corporation, Aboitiz Power Corporation, and Taiwan Cogeneration International Corporation.

New law needed

In response, Energy Secretary Carlos Jericho Petilla called on Congress to craft a legislation that would reduce the legal hurdles in building power plants.

At present, setting up power plants in the Philippines takes an average of 3 to 5 years, Petilla said.

“We want a bill that will fast track the processing of permits and, if possible, no TRO (temporary restraining order) against these projects,” said the energy chief.

Meralco posted a sales growth of -3.1% in the first 9 months of 2014 due to typhoons, frugal household consumption, and cooler temperature.

Despite this, its president, Oscar Reyes, said Meralco intends to increase its capital expenditure to P13.5 billion ($301.37 million*) in 2015 to complete new electrical projects to meet future energy demands.

Republic Act No. 8975 – an act to ensure the expeditious implementation and completion of government infrastructure projects by prohibiting lower courts from issuing TROs, preliminary injunctions or preliminary mandatory injunctions – gives government projects of national interest immunity from TROs issued by courts other than the Supreme Court.

But power plant projects could not enjoy the same privilege.

“Maybe there could be someone who determines national interest. The President can sign. Malacañang can come in and sign,” said Petilla.

The expansion of power plants in the Philippines, especially coal-fired projects, has strongly opposed by environment groups. Citing a 2014 United Nations report, they say the country is heading away from sustainability by pursuing such power projects.

The Philippines has 17 coal plants, whicl another 24 coal plants are on the way, according to the Philippine Movement for Climate Justice. ­– Mick Basa /



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