POSTSCRIPT / April 9, 2002 / Tuesday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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FVR, please help solve problems you’ve created

PAGING RAMOS: Wherever he may be, ambassador-at-large Fidel V. Ramos should be asked by President Gloria Macapagal Arroyo to rush home to help solve the numerous problems traced to his flawed administration as president once of the Republic.

Some of the big ones traced to the Ramos administration are:

  • Soaring price of electricity threatening to trigger a social upheaval.
  • Capricious increases in the price of gasoline and other petroleum products.
  • Disappearance of billions meant for modernizing the armed forces.
  • Dissipation of billions in the Expo Filipino project on Clark Field.

There are many other problems with Ramos fingerprints on them, but those listed above are the more obvious ones. They are more than enough for starters.

* * *

RUNAWAY IPP COSTS: The current subject of animated discussion is the bid of the Manila Electric Co. (Meralco) to raise much-needed capital from its captive consumers by raising to unprecedented levels the electric bill of its users.

In effect, consumers are to contribute capital to sustain the business, in the guise of paying for electricity they use, without being issued shares of stock.

One of the culprits for the bloated electric bill being foisted on consumers is the PPA, or Purchased Power Adjustment, which is one of the monstrous creations of the Ramos administration.

Half of the electric bill goes to PPA, which is in theory the cost of wholesale electricity bought by Meralco being passed on to the consumers. If the purchase price is high, the pass-on or retail cost to consumers naturally will also be high.

The PPA is unusually high because of some questionable charges allowed by the Ramos administration in the contracts of IPPs or the Independent Power Producers outside the government-controlled National Power Corp.

* * *

SPECIAL DEAL FOR IPPs: The IPPs were assured that all the power they could generate would be bought or paid for at guaranteed prices.

The power generated by the IPPs is forced on the Napocor, and charged to it regardless of whether or not the Napocor can or will pass it on to distributors or users.

This is partly why Napocor’s debt has soared to an incredible hundreds of billions. There is no way Napocor can pay this huge debt, so there is a move to just pass it on to innocent taxpayers upon Napocor’s privatization.

The expensive electricity bought from the IPPs by Meralco is passed on to Meralco consumers at the same high price, not to mention any markup that the Meralco may tack on. That explains the PPA item bulging on one line of your electric bill. It’s about half of your total payment.

The IPPs just keep generating power, or claiming to be generating so much (who bothers to check anyway?), then claiming payment for the entire alleged output at the exorbitant price guaranteed by the Ramos administration.

* * *

ANTI-MONOPOLY BAN: The Lopezes who own and operate Meralco reportedly had joined the fun and put up their own IPP, from which it now buys expensive electricity at a volume and a price that the consumers know nothing about. The overprice, if any, is passed on, with a markup we assume, to Meralco users.

This point is disturbing because there has been no adequate audit of the operation of the IPPs, including the reported Lopez generating firm.

We thought all along that prior to the law privatizing the Napocor, there was a ban against the same interests owning both generation and distribution facilities. The dictator Marcos, we recall, decreed that to prevent the pernicious effects of monopolies, anybody into power distribution should not be into generation also, and anybody into generation should not be into distribution.

(It was much like the anti-monopoly law in the United States providing that anybody manufacturing computer hardware must not also be manufacturing computer software.)

How do we now explain reports that some people are/were into both generation and distribution? What has the government been doing? Sleeping? Or conniving with the operators? And sharing the loot?

* * *

RAMOS-TYPE CROSS: Who regulates the Ramos-type IPPs? Who audits their operation? What safeguards are in place to prevent auditors from colluding with the firms being audited?

How will the government explain reports that half of the power generated independently by the IPPs ends up being excess or wasted power? In other words, the IPPs just keep merrily generating electricity, then send the bill for the whole claimed output whether it is used or not.

This unregulated and unnecessary cost is passed on to us end-users.

Nobody sees the alleged electricity generated by the IPPs. Unlike water or food and similar merchandize, we do not save or store electricity. If not used, it is simply dissipated.

But we pay for it, because Ramos guaranteed that the IPPs be paid for their entire claimed output.

This is one of the big crosses the poor consumer is carrying to this day from the time Ramos dropped it on his frail shoulders.

* * *

PETRON WAS ON OUR SIDE: Then there are the capricious increases in the price of fuel. The oil companies, including the so-called new players (who are actually veterans in the racket), have just imposed phased pump price increases.

We say “phased” because their trick is to impose the price increases in small painless doses so motorists will be able to live with it. But wait over a length of time and you will discover that they had been able to get away with a hefty increase that would have been unacceptable had it been imposed in one fell swoop.

It used to be that the government-controlled Petron was the effective countervailing force against the foreign oil firms. Shell and Caltex were held back from their profiteering tendencies because we had Petron.

With Petron controlling 40 percent of the market, Shell and Caltex could not raise pump prices on their own if Petron refused to go along — which it often did.

* * *

BUT RAMOS SOLD IT: But suddenly Ramos hit upon the idea of selling Petron — to the Arabs themselves! Petron was at that time the biggest corporation in the country in terms of earnings. There was absolutely no need to sell it and all the reasons to keep it.

We don’t know how many billions Ramos earned from the juicy transaction, but my barber says Ramos would have been stupid not to have collected a bagful of petrodollars from that dream deal.

Now Petron is on the other side of the oil cartel, not on our side. Now under control of the Arabs, it connives with Shell and Caltex and the rest of the gang to jack up prices whenever there is some disturbance in the Middle East to use as excuse.

* * *

LIKE CRACKED CHINA: There was also no urgency when Ramos sold Fort Bonifacio in what was billed then as the real estate deal of the century.

The excuse given was that the armed forces needed the money for alleged modernization. The AFP was supposed to get an P8-billion slice from the deal. That was thoughtful of Ramos, a general, a West Pointer, former defense secretary and chief of staff.

Some generals who thought Ramos was serious about modernization even made a shopping list and actually went on window shopping sorties, at great expense to the salivating suppliers aboard. But the thing fell through, because there was no P8 billion at the time.

The P8 billion was supposed to be an untouchable trust fund, but it was missing! What was not missing, to the consternation of the unsuspecting buyer, was the earthquake fault running through the heart of Fort Bonifacio and depreciating it like cracked Ming china.

Meanwhile our foot soldiers are literally that — foot soldiers. They walk around wearing either overpriced boots or the more comfy rubber sandals! They get inferiority complex when they see their American partners in joint exercises.

Our soldiers lug around Vietnam-vintage rifles with which to hit the enemy. We won’t be surprised if their bulging backpacks are crammed with their laundry and not food items and combat gear. We were told that their faded uniforms are replaced only when some girl friend of somebody needs some money (commission) and so a contract is signed for new uniforms and patches.

* * *

RAMOS WHITE ELEPHANT: Want to see a White Elephant? Hie off to Clark Field and see Ramos’ Expo Filipino. We had wanted to talk about this project whose cost estimate had ballooned to soaring proportions we lost track of how much the project eventually cost.

It has been in the news lately, because President Arroyo followed sound advice to rehabilitate and operate Expo Filipino. Her move corrects the childish decision of former President Erap Estrada to padlock the project just because it was not built by him and somebody else got the commission.

But this will have to wait for another day since we’re running out of space.

* * *

(First published in the Philippine STAR of April 9, 2002)

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