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MANILA, Philippines – The chairman of the Senate committee on energy on Wednesday, May 17, threatened to revoke the franchise of the National Grid Corporation (NGCP), as parts of the country continue to experience power outages.
Senate committee on energy chairman Raffy Tulfo said this in a press briefing after the committee hearing on NGCP operations and the power supply situation in parts of the country.
Tulfo told reporters that he met with President Ferdinand Marcos Jr. ahead of the Senate hearing, to discuss his concerns about NGCP and his recommendations to fix the issues hounding the privately-owned corporation in charge of operating, maintaining, and developing the country’s power grid.
“I met with the President and I told him the possible security risk. Sinabi ko sa kanya mga recommendation ko, pumayag naman siya kung para sa ikakabuti ng bayan, so be it. In fact, I told him about sa pagkansela ng franchise ng NGCP if makitaan ng violations,” Tulfo said.
(I told him my recommendations, and he agreed with them, if it would be for the good of the country. In fact, I told him about the cancellation of NGCP’s franchise if violations are found.)
In a statement issued before the Senate panel hearing on Wednesday, Malacañang said that Marcos was open to taking back control of the NGCP “if necessary.”
NGCP was given a 50-year franchise to operate the country’s power grid in 2009. Tulfo said that if violations are found, Congress could revoke its franchise.
Tulfo said the “fastest way” to resolve the issue is for his committee to look for violations, which are grounds for revoking the franchise.
“Tulad nito, marami silang violations na hindi sila tumutugon doon sa requirement na in a set period of time na makagawa sila ng maraming system developments. So isang violation ‘yun,” he said.
(Like in this case, they have a lot of violations on not meeting the requirement that in a set period of time, they should have done many system developments. That’s one violation.)
“‘Yung kanilang franchise ay isang privilege so kailangan, we specify ‘yung kanilang mga violations,” Tulfo added. (Their franchise is a privilege that’s why we need to specify their violations.)
Tulfo proposed to revert control of the power grid to the government through the National Transmission Corporation (TransCo), and limit NGCP’s role to maintenance operations. TransCo is the owner of the country’s power transmission assets.
Transco used to operate the power grid from March 2003 until January 2009, when operations and maintenance were transferred to the NGCP. The NGCP is 40% owned by the State Grid Corporation of China (SGCC), while the remaining 60% is owned by a group of Filipino businessmen led by tycoons Henry Sy Jr. and Robert Coyiuto Jr.
During the hearing, Tulfo said that he received information that 95% of NGCP’s profits go to its investors as dividends and only 5% is reinvested for development projects. He asked NGCP to confirm this information, but its corporate secretary, Ronald Dylan Concepcion, said they did not have the exact figure at the time.
A visibly irate Tulfo asked why Concepcion could not provide the information when he was the corporate secretary who is in charge of documents. This prompted the committee to subpoena the NGCP to release its financial documents and other information relating to their operations.
The Energy Regulatory Commission (ERC), however, said that only P12 billion or 29% of the NGCP’s P41-billion income in 2022 went to dividends.
Senator Sherwin Gatchalian, vice chairman of the energy committee, also questioned why the NGCP was already supposedly charging customers for projects that are not yet on stream. At least 71 projects of the NGCP are delayed, the senator said in an interview with ANC ahead of the May 17 Senate hearing.
Gatchalian, like Tulfo, agreed that China’s stake in the NGCP is a security concern. He has also flagged the ERC and the country’s intelligence and security sector for still not coming out with an audit of the NGCP and national power grid’s performance and security.
Gatchalian said he had always thought it was a bad idea to privatize the operations of the national power grid. But since that’s already the situation, he said, the government should also be “careful” about the message it sends to potential foreign investors.
Meanwhile, Senator Grace Poe said that power outages in the country are “unacceptable.”
“Electricity should provide comfort and convenience, hindi paghihirap (not suffering),” she said.
“And as I have repeatedly reiterated, a franchise is a privilege, not a right. Kalakip nito ang malaking responsibilidad na pagsilbihan ang publiko at sa oras na hindi ito magampanan ng maayos, maari itong bawiin (attached here is a big responsibility to serve the public, and in times that it can’t fulfill its duties, it can be taken back),” Poe added.
‘NGCP is run by and for Filipinos’
Meantime, the NGCP spokesperson said the company is “run by and for Filipinos” following calls that Congress should revoke its franchise.
In a May 18, Wednesday interview with ABS-CBN News, NGCP spokesperson Cynthia Alabanza defended the company from allegations that its Chinese partners might be able to compromise the country’s transmission network, saying its systems are only accessible physically.
Alabanza assured that despite the SGCC’s stake in the company, all operations are run by Filipinos.
“This (NGCP) is run by Filipinos, for Filipinos talaga (truly),” she said.
Explaining further the role of their Chinese partners in the NGCP, Alabanza explained that the SGCC’s stake in the NGCP was a requirement for the franchise, as they needed a technical partner to operate with.
“Sila (government) ang nag-require na magkaroon ng technical partner. And at that time, walang ibang qualified technical partner sa Pilipinas, kung hindi gobyerno. So, it didn’t make sense to privatize itself, diba?” she said.
(The government was the one that required a technical partner. At the time, there was no other qualified technical partner other than the government. So, it didn’t make sense to privatize itself, right?)
On the allegations that too much of NGCP’s profits go to their investors as dividends, Alabanza said around P300 billion has been put into various projects over the past 14 years since they got the franchise in 2009.
“Nakapagtayo na kami ng 3,729 circuit kilometers of lines, at nadoble na namin ang transmission capacity sa buong Pilipinas,” she said.
(We were able to put up 3,729 circuit kilometers of [transmission] lines and we were able to double the transmission capacity in the whole Philippines.)
This investment is higher than the P33 billion spent by the National Transmission Corporation (Transco) investments in 5 years prior to privatization of the transmission network, she said.
Alabanza invited senators to visit their facilities and see for themselves that they are capable of independently handling the national grid.
“Subject only to the security protocols of the facility, puwede silang (senators) pumasok (They can enter),” Alabanza said. She added that previous Energy Secretary Alfonso Cusi and former Transco president Melvin Matibag had inspected the facility.
“I don’t want to speculate how government will do, but all we know is based on the records, based on facts, na pinaganda at pinaigi ng NGCP yung transmission services at bumaba yung transmission rates (NGCP was able to improve the transmission services and lower the transmission rates),” Alabanza said. – With reports from Bea Cupin and Matthew Yuching/Rappler.com