POSTSCRIPT / June 2, 2005 / Thursday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Temporary fiscal crisis hits VIPs on jueteng list

FISCAL CRISIS: The total — okay, near-total — disappearance of the multibillion-peso game of jueteng with a wave of the presidential wand is an artificial situation. Like all deviations from the normal, it has created some tension.

The main tension arises from the disruption of the normal cash flow of long-time beneficiaries of payola from jueteng lords. But those on the jueteng list cannot be kept waiting forever.

Sooner or later, something’s gonna give. Especially because while the magic wand was waved by the right hand, we really do not know what the left hand did.

My bet is that patience, of those on the waiting list, will pay off. Maghintay-hintay lang po kayo. The artificial fiscal crisis cannot last forever.

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SAFETY ISSUE: Some readers reacted to the antics of officials acting as hitmen of the Chamber of Automotive Manufacturers of the Philippines Inc. by harassing importers of used vehicles that compete with CAMPI’s brand-new models.

On the safety of right-hand-drive vehicles converted to left-hand-drive for use on local roads, reader Wiley Cayote said, “I am opposed to any right hand drive vehicle… it poses a safety hazard since it will be transformed not by the manufacturer but by non-certified shade tree mechanics.”

Part of my response: “I’ve asked about the safety of converted right-hand-drive vehicles. I was told that the basic design and assembly of cars are such that they can be either left- or right-hand drive. The production cost would be prohibitive if manufacturers had two entirely different designs and assembly lines.

“The ex-factory configuration of the vehicles depends on where they are to be shipped or exported. For instance, those sold in Japan are right-hand-drive when they leave the factory, while those meant for the Philippines are left-hand. But the units are so designed that it would be easy to convert the orientation of their steering assembly either way.”

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NO CUT & PASTE: In the past, conversion of RHD vehicles was left mostly to the ingenuity of Filipino mechanics. We heard tales, unverified, of local mechanics allegedly sawing the steering column or an axle and then welding it into place on the other side.

Legitimate converters would have none of that cut-and-paste hit-and-miss procedure. They have installed systems and enforced standards for retrofitting. To match the conversion requirements of Japan-made vehicles, they buy OEM (original equipment manufacturer) conversion parts from left-hand-drive countries like Taiwan that manufacture the parts needed by specific models.

The conversion could be done in Japan before the RHD units are shipped out, but that would be too expensive. So they do the conversion here and, in the process, provide work for Filipinos and revenue for the government — and lower the cost.

The Land Transportation Office tests the converted units for safety and smoke emission before they are registered. The proper taxes are paid before the vehicles are released from Subic.

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PROBLEMATIC: There is a law against RHD vehicles being driven on Philippine roads. I think it is being enforced. It should be.

(But this is not an issue, because by the time imported RHD vehicles are taken out of the Subic Freeport, they have been converted to left-hand drive and tested for roadworthiness.)

Mechanically, an original RHD vehicle is by itself just as safe and as dependable as left-hand-drive vehicles. The safety concern is not in the RHD car itself, but in its being driven on our left-hand-drive roads.

A RHD car can pose a problem when thrown into regular traffic. Handling it is problematic for the average driver who is used to driving on a road network meant for left-hand drive vehicles.

I have driven a RHD vehicle (the gas-fed Malaysian-made demo vehicle of the PNOC) in regular traffic. I consider myself a, ehem, good driver, but I still found it a dangerous operation that required total concentration, utmost skill, and some courage.

The driver, who is on the right side, may need someone to sit by the left window side to tell him how close he is to vehicles and other objects to the left of the RHD vehicle as it moves through traffic.

My conclusion after wiping my perspiration upon getting off the Malaysian contraption: The authorities are right in banning RHD vehicles from public roads!

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MERALCO SIDE: The Manila Electric Co. disputes the remarks of reader Mon Ramirez, who has said (POSTSCRIPT , 29 May 2005) that Meralco could lower generation charge if it sourced more power from National Power Corp. than from Lopez-controlled generating firms charging higher rates. He also said that Meralco’s ad was misleading in its claim that the pass-on generation charge had been slashed.

Meralco Vice President Elpi Cuna Jr., director for corporate communication, said in a rejoinder:

“First, Mr. Ramirez criticizes Meralco’s ad which states that NPC’s 47 centavos increase will be reduced to close to half. In his example, he uses 24 centavos as the prospective savings. Then he further reduces this in half and says that the only savings the customers will have is 12 centavos per kwh.

“This is not the case. In fact, since cost of generation is a strict-pass through, the reduction in over-all cost of generation, 24 centavos in Mr. Ramirez’ example, supplied to Meralco (NPC and IPPs) is fully passed on to customers. Thus, even if you factor in the reduction in the mandated rate reduction which only is applied to residential users, there will still be net reduction to Meralco consumers.

“Mr. Ramirez also uses the rates of IPPs in 2000 to show that NPC’s rates are lower. Specifically on the figure of P18 per kwh bought from First Gas, it had been repeatedly explained in various fora including a Senate hearing that the period from Oct. 26, 2000, to Dec. 15, 2001, was covered by a Letter of Agreement with NPC. During that period, NPC assumed the responsibility of dispatching the IPPs selling power to Meralco. The very low dispatch of the plants and the fact that fixed costs have to be nevertheless paid as with any IPP contract including that with NPC, have resulted to higher effective rates per kwh from the IPPs.

“Mr. Ramirez also failed to mention that NPC’s rate was artificially brought down by over P1 per kwh in May 2002 not because of a reduction in NPC’s costsut in compliance to a presidential directive. It should come as no surprise then for NPC to petition in 2004 for a close to P2 per kwh increase in Luzon, of which P1.23 per kwh was granted in October 2004 and another 9.29centavos this April. In addition, it has been allowed recovery of prior period costs which is a monthly add-on to the basic charge of close to 50 centavos per kwh.

“Mr. Ramirez should have used more updated figures. For the month of March 2005 (prior to the second round of NPC increases), the cost of NPC supplied power (inclusive of the P1.55 per kwh transmission related costs) was P5.6943 per kwh. This is close to 30 centavos higher than the purchased power cost from the IPPs of P5.40 for Quezon Power, P4.80 for Sta. Rita, and P5.29 for San Lorenzo, Meralco’s major IPPs.

“Even if the other charges component of NPC’s rate of about 20centavos per kwh is removed, the purchased power cost from NPC will still be higher at P5.49 per kwh. And this does not include yet the 47 centavos increase the NPC implemented starting April 26. Adding the 47 centavos increase will easily bring purchased power cost from NPC (excluding other charges) to P5.96 per kwh.

“Mr. Ramirez should also know that if the IPPs are run at contract levels or at Minimum Energy Quantity (MEQ), the effective average purchased power cost from the IPPs can further go down to P4.96 for Quezon Power, P4.70 for Sta. Rita and P4.80 per kwh for San Lorenzo. Again, this is combined generation and transmission charges which compares with NPC’s P5.4943 per kwh, or P5.96 per kwh with the 47 centavos increase.”

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PINOY ESSAYIST: A Filipino youth, Wilfred Oliver Segovia, topped the recently concluded international essay competition held on the initiative of the World Bank.

Segovia tied with Asnia Asim, a youth from Pakistan, for the top prize. They split the $5000 first prize and the $1,000 second prize, for a total of $3,000 for each of them. Another Filipino, Wilfrido Kabiling, was among the nine finalists.

The theme of the competing essays was “Building a secure future: Seeking practical solutions.” You may go to http://www.essaycompetition.org to read the winning essays.

Information on the contest and the winners came from Moira Enerva of the World Bank Knowledge for Development Center. No details about the winners, such as their ages and school, were immediately available.

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(First published in the Philippine STAR of June 2, 2005)

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