BAGUIO CITY – The City Council approved a resolution inviting the members of the city’s Special Bids and Awards Committee (SBAC) and other responsible officers in the bidding and implementation of the privatization of the city-owned Asin minihydro power plants to shed light on why the multi-billion project has not yet been implemented despite being awarded to the supposed winning bidder during the local legislative body’s regular session on September 17, 2018.
The resolution authored by Councilor Peter Fianza stated there is a need to apprise the local legislative body on the status of the multi-million privatization project and of such other possible recommendations or alternative moves to be considered, even at least, to have the renewable energy plants made operational to avoid further losses on the part of the local government and the eventual deterioration of the units of equipment installed in the said plants.
Earlier, the local legislative body passed Resolution No. 219, series of 2011 approving the terms of reference and pro-forma contract for the privatization of the Asin minihydro power plants.
Further, the City Council approved Resolution No. 037, series of 2017 that confirmed the memorandum of agreement dated 30 January 2015 entered into by and between the local government and Kaltimex Energy Philippines, Inc. on the rehabilitation, upgrading, expansion, operation and management of the city-owned Asin minihydro power plants.
However, to this date, despite the award and the alleged issuance of the notice to proceed (NTP) to the winning bidder, the contract has not been realized to the prejudice of the local government. Instead of earning, it has been subsidizing the preservation and maintenance of the existing facilities since October 12, 2012 when the Benguet Electric Cooperative (BENECO) decided to disconnect it from its system when the Energy Regulatory Commission (ERC) issued a cease-and-desist order to the local government to temporarily stop the operation of the power plants until such time that it secures a certificate of compliance for the hydros from the regulatory body.
It will be recalled that the local government took over the operation of the three Asin minihydro power plants after the expiration of the city’s 25-year agreement with the Aboitiz-owned Hydroelectric Development Corporation (HEDCOR) sometime in 2006 and the local government was able to earn some P30 million annually from the continuous operation of the said plants.
Kaltimex had been reportedly requesting the local government several time extensions to address issues and concerns that cropped up during their supposed due diligence, but the project never pushed through for more than a year and a half after the contract was confirmed by the local legislative body.
BENECO has signified its intention to partner with the local government, the Tuba municipal government and the indigenous peoples (IPs) of the host communities if only to make the renewable energy plants operational by providing quality power at cheaper cost, and to maximize the utilization of the city’s available resources for the benefit of the consumers.
By Dexter A. See