POSTSCRIPT / November 1, 2007 / Thursday


Philippine STAR Columnist

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Who pockets the coal overprice at Napocor?

EARLY TRAINING: Election lawyer Romulo B. Macalintal’s suggestion that we abolish barangay (village) and sangguniang kabataan (youth council) elections and just add one or two councilors to the usual number with duties to look after barangay affairs, is sound.

The just-concluded barangay and SK elections — shot through with all the grime and crime of regular partisan elections — are the convincing argument for their abolition.

It is sad but true that the inclusion of a youth member in the barangay council has proved in many places to be an early training ground for producing corrupt and self-serving politicians.

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TOO COSTLY: “Barangay and SK elections have lost their non-partisan character,” Macalintal observed. “Their divisive nature has practically defeated the very purpose of creating these barangays which is to unite and promote camaraderie.”

He cited one election case, of which then Associate Justice (now Chief Justice) Reynato Puno said that while “elections are necessary in a democracy, too much elections are divisive, destabilizing and prohibitive for developing countries suffering from scant resources. Too many elections are too costly for government, too costly for the candidates, and too costly for the people who ultimately will bear their burden.”

Indeed, the call of the hour is for less partisan politics. I dare say that if this country is to be saved, it has to be saved first from politicians. It is doomed if left in the clutches of the present gang of politicians ruling it.

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BIDS SURE TO FAIL: The National Power Corp. tendered last Oct. 26 to buy four 65,000-ton thermal coal cargoes for delivery late this year.

The tenders are for two trial cargoes into the Sual power plant in Pangasinan with an approved budget of P315 million ($6.4 million at P45 = $1) and another two low-sulphur blending coal cargoes to the Pagbilao plant in Quezon at a budget of P304.8 million ($6.22 million at P49 = $1), according to ABS-CBN Interactive.

The coal for Sual is pegged at $98.46 per metric ton, way above the ceiling price.

The report also said that no delivery period was specified, but a company spokesman said the fuel should be delivered within a month of the award.

Our source said the pre-bid conference that was set Oct. 25 appears to be heading for another failed bidding, just like what happened in the past months, when the Nov. 9 bidding deadline sets in.

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HEAVY BURDEN: It has become a habit of the Napocor to go into negotiated procurement. This tends to confirm reports that procurements of 65,000-ton panamax shipments are gifts to politicians poised to investigate alleged corruption at the Napocor.

The Napocor gods would not care that such deals jack up the price of electricity. The burden of overpriced coal (comprising 28 percent of our mixed energy requirement) will be borne by millions of captive consumers anyway.

No wonder the Napocor mafia has refused to transfer to private hands the administration (including the procurement of coal) of power plants as mandated by the Electric Power Industry Reform Act.

Under the Epira, the Napocor is supposed to hand over the administration of IPPs to their owners before the end of the year. But the law continues to be ignored.

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MANIPULATION: With these plants still being operated by the Napocor and the IPPs, the state-run power firm retains its capacity to manipulate the electricity market.

Manipulation is suspected to have happened last July 25 when the Luzon power grid experienced widespread outages. Manipulation has also been observed at the Wholesale Electricity Spot Market.

It is not just overpricing dogging the system, but also mismanagement. How else can we explain the summer brownouts traced to several plants running out of coal – which was suspicious because fuel requirement is predictable?

To cover their tracks, the cabal is now moving to amend Epira to lower the privatization threshold to 50 percent instead of the present 70 percent. The threshold is the part of Napocor’s assets that must be privatized within a timeframe.

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COINCIDENCE?: Is it plain coincidence that some politicians have coal-trading firms?

Industry insiders tell us how the racket goes. The mafia makes an overpriced coal tender of $100-$120 per metric ton (while the actual price in the world market is only about $65-70 per metric ton).

Multiply the overprice by 65,000 metric tons per delivery and you get the staggering windfall for favored dealers.

Consider also that the price was not pegged to the current exchange rate of P45=$1 but to P50-P52=$1.

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OVERPRICE: The Napocor, citing fuel shortage, ordered five shiploads of coal last April at $84 per metric ton and at the exchange rate of P50 = $1, or at a total cost of P1.38469 billion.

If computed at the current exchange rate of P44 to the dollar, the actual price of the contracted coal would be considerably much less.

Note that the Napocor ordered the coal at a time when its regular price was only $20 to $30 per metric ton — or at an overprice of $54 per metric ton or $270 million!

That overprice will certainly be passed on to us power consumers.

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GMA KNOWS?: Power firms are not allowed to import their own coal. They are required to get their fuel from the Napocor, which does the buying.

Who, in or above the Napocor, gets the usual fat commission, aside from the additional cut from the overprice?

The dizzying amount of money being made on the side raises the question: Is President Gloria Arroyo unaware of this?

If she is unaware of the billions changing hands, how come? But if she knows, what is she doing about it?

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(First published in the Philippine STAR of November 1, 2007)

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