POSTSCRIPT / September 7, 2000 / Thursday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Erap finds solution to rising fuel prices!

ON his way to New York to join hundreds of world leaders lining up for the United Nations podium to deliver centennial speeches, President Estrada hit upon a bright idea on how to solve the problem of high fuel prices going even higher.

The Erap solution is to devote two paragraphs of his marathon speech to appeal to the oil-producing giants to please sell crude oil at a discount to the Philippines and other poor countries reeling from rising fuel prices.

Erap Estrada must have been captivated by the seeming simplicity of the notion.

Oo nga naman, if you buy crude oil at a lower price, you can sell your refined petroleum products cheaper. Clever! Why didn’t Energy Secretary Mario Tiaoqui or some genius by the President’s elbow think of this earlier?

* * *

BUT my barber is not impressed. Waving his razor, he fires off 1-2-3 questions that I’m not competent to answer:

  1. What gave Erap the illusion that he has enough clout or stature to make the OPEC (Organization of Petroleum Exporting Countries) listen to him? Even his cronies and kamag-anak do not listen to him anymore.
  2. Why would OPEC members sell cheap oil to the Philippine government when it is not in the business of importing and refining oil? Saudi Arabia won’t give discounts to Shell and Caltex just because they have refineries in the Philippines.
  3. After the perfunctory clapping at the end of his UN speech, what will Erap do to follow through in a big way his appeal for oil price discounts for poor countries?

* * *

THE sight of taipan Lucio Tan on the same US-bound flight of President Estrada has infuriated Erap critics smarting from the recent dismissal of tax charges against Tan on a mere technicality over the late filing of a government motion to reinstate the case.

If I were the President, I would ignore the angry voices and insist that Tan, or whoever happens to own or chair Philippine Airlines, be on the same flight. This is some sort of insurance that the plane is indeed airworthy and the crew the best there is.

During the time of President Marcos, then PAL chairman Ramon Cruz Jr. was always on the jet bearing the presidential party on foreign trips — mainly for the same reason. Whether Cruz was facing tax charges or not (he was not) was immaterial to his riding with the President.

* * *

IN Congress, meanwhile, some members of the President’s Lamp party are in a quandary over the bill creating a non-profit National Oil Exchange (OilEx) that will lower fuel prices by buying gasoline and other oil products from the lowest bidder among some 40 refineries and traders the world over.

While Lamp members, who are among the 190 of the 220 members of the House of Representatives, have signed up as co-sponsors of the OilEx bill filed by Bataan Rep. Enrique T. Garcia, they are intrigued by the continued failure of Mr. Estrada to publicly endorse the measure.

All the President does is whisper to lawmakers to go ahead and pass the OilEx bill, assuring them that he would sign it into law the moment it is passed. A senator said the President may be trying to use Congress in his dealing with the oil cartel.

* * *

THE fuel price crisis is worsened by the glaring lack of a well-thought out and integrated fuel or energy policy. Market forces are left to operate without government attempting to influence them, usually to the neglect of consumers who have nobody to protect them.

At this late date, there is still no program to aggressively reduce our dependence on oil. There is no significant effort to develop alternative sources of fuel and to gradually reduce the use of imported crude oil as energy source.

Secretary Tiaoqui, who should be in the forefront of such a search for alternative fuels, appears more concerned with protecting the investments and profits of foreign oil companies than reducing our dependence on them.

* * *

READER Manuel C. Diaz, a US-based Filipino geologist, traces the problem to the continued importation of our energy requirements.

His suggestion: “We should start looking at our agricultural sector to produce indigenous fuel sources like ethanol fuel from sugar and make the ethanol the oxygenate to produce reformulated low-pollution gasoline.”

Biodiesel is another cheap fuel that Diaz said could be produced from coconuts, which are abundant in this country.

“Copra price now is at the bottom,” he says. “If we can use coco oil as the feedstock for our low-pollution biodiesel, we can stabilize the coconut industry and at the same time conserve our dollars.”

* * *

“IF we can substitute 10 percent of our fuel requirements, that will translate into $130 million savings per year,” Diaz continues. “This will be an added income to our sugar planters and our coconut farmers.”

He says that Congress should amend the Clean Air Act specifying and mandating that reformulated gasoline should use ethanol as the oxygenate. This is being done in most US cities, according to him.

The amendments should also mandate that the mineral diesel be blended with coco diesel or biodiesel to reduce pollution as is being done in most European cities, he adds. While at it, Congress should pass laws giving tax relief to projects that produce indigenous fuel.

* * *

WHEN our barber says that even the cronies do not listen to Erap Estrada anymore, we only have to look at the Philippine Ports Authority to get a validation.

Last month, President Estrada himself struck down a plan of the PPA bids and awards committee to deny the lowest bidder the nearly P3-billion contract that he had won for the development of the Batangas Port.

Through Executive Secretary Ronaldo B. Zamora, the President ordered in writing that the contract be given to the Shimizu/F.F. Cruz tandem that had submitted the lowest bid of P2.885 billion.

That should have been the end of the quarrel triggered by a PPA plan to give the job instead to Hanjin-Konoike, whose bid was for P2.975 billion, or P90 million higher. But until yesterday, the crony and his runners are still busy looking for an excuse to go around the President’s order.

No formal board resolution is being prepared to carry out the board decision to give the award, as instructed by President Estrada, to Shimizu/F.F. Cruz.

* * *

THE case has dragged on that even congressional committees got a chance to look into the case by way of the usual public hearings. Their verdict: The President is right. The contract should go to the lowest bidder.

In the last hearing of the committee on transportation, several congressman said that the bid of Shimizu/F.F. Cruz was the “most advantageous and beneficial to the government.”

Rep. Victor R. Sumulong of Antipolo said: “The issues being raised against the lowest bidder, Shimizu/F.F. Cruz, are too insignificant to overturn its bid, which is P90 million lower.”

While the bid papers had some clerical errors, he said these were “too minor” and do not substantially affect the lowest bidder “nor will it cause damage or prejudice to the government.”

* * *

REP. Aniceto G. Saludo Jr. of Southern Leyte, after examining the documents, concluded that the “bid of the lowest bidder was legally in order and complying.”

He added that a “minor discrepancy” appears only in a supporting document that can be corrected without changing or improving the bid.

Saludo expressed surprise why the bids committee never called the lowest bidder to a clarificatory conference. Any discrepancies could have been easily clarified if only to hasten the evaluation process, he added.

* * *

IN the same hearing, the two-envelope bidding system used by the PPA was described as seriously flawed. Bids committee chairman Edilberto Catalan admitted that there was no rule or guideline requiring such a system.

In the two-envelope bidding system, the first envelope contains the submitted technical requirements while the second envelope is for the financial aspects of the bid.

Most congressmen in the committee said that once the second envelope containing the bid price is opened, the bids committee can no disqualify the bidder based on alleged non-compliance with the technical requirements contained in the first envelope.

Upon the advice of Saludo, Catalan promised to review the two-envelope system being used by the PPA.

* * *

(First published in the Philippine STAR of September 7, 2000)

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