Baguio City owns the distinction of being the only local government in the country that owns three minihdro power plants that are situated in Asin, Nangalisan, Tuba, Benguet. For more than a decade now, the three minihydro power plants greatly contributed in generating resources, either in cash or in other forms, for the local government that also helped in enhancing the delivery of its services to the people through the years.
In 1981, the city government decided to privatize the operation of the power generation facilities and through the conduct of a public bidding, its maintenance and operation was subsequently awarded to Davao Lights, an Aboitiz-owned and controlled corporation, before the same was allegedly sub-leased to its sister company, the Hydroelectric Development Corporation (HEDCOR), which is based in Benguet and Baguio. Numerous controversies cropped up when the power generation plants were under the management of HEDCOR and one of the worst allegations was that the local government was being shortchanged with its share of power from the plants. In 2006, the 25-year lease agreement expired and HEDCOR turned over the management of the plants to the city after it virtually undressed them of their supposed inherent units of equipment and those that were installed for its quality power generation operations. After being able to earn from it, HEDCOR virtually turned the facility into an incompetent one by removing all its improvements which is not supposed to be since all improvements must be left to the new management.
For several years, the city government, without any expertise, was able to operate the power generation plants through the able assistance of the Benguet Eletric Cooperative (BENECO) which bought the power that was produced. Ironically, the sad thing was that the Energy Regulatory Commission (ERC) discovered that the city had been operating the power plants without the required certificate of compliance which is a basic requirement for old and new plants to secure from the government in order to be able to sell the produce of the plants.
Again, it took three years for the city government to be able to select a winning bidder for the privatization of the power plants and their non-operation for the said period of time was detrimental in sustaining the city’s revenue sources considering that the operation of the Asin power plants contributed an annual income of P30 million.
We question the competence of those that composed the Special bids and Awards Committee (SBAC) because why did they bid out the multi-million contract when the local government does not own the water rights for the Asin river. Now, the city is trying to rush things for the transfer of the water rights from its original possessor, the Baguio Water District (BWD) to the local government. This is a clear example of haste makes waste. In fact, BWD and the city government stand to face the imposition of stiff penalties by concerned regulating agencies because they operated the Asin power plants without the benefit of the accurate permit. What was issued to BWD was the water rights for domestic use and not for power generation purposes. Worst, the water rights are reportedly not transferable.
Based on pour researches, we found out that the winning bidder Kaltimex Energy Philippines has not done any actual survey in the area that made them as a qualified bidder for the ambitious project. We understand their Indian principal already spent millions of pesos without seeing the light at the end of the tunnel. It is unfortunate that those who are supposed to work for the company have not done their assigned jobs right. It also came to our attention that the winning bidder is reportedly trying to get the data gathered by another company that was already submitted to the energy department for their ready reference. This only means that the company is ill-equipped to take over the facility because even its people do not have the correct data being required by concerned regulating agencies to justify their operations.
We suggest that the city government must first make sure that it gets hold of all the pertinent requirements from concerned regulating agencies before it can bid out the project. We must not await that the Asin minihydro controversy will just erupt right in front of your faces and beyond your control because it will significantly affect the local government’s image to investors. Further, the city government must cleanse its ranks in order to rid those who had been receiving millions of pesos in alleged advances just for the company to be awarded the project. Let the project push through with clean hands in order to correct the defects of the past because a repeat of the shortcomings of the previous privatization would just render the power generation plants while elephants to the detriment of the city’s bid to use it as an income-generating project. The defects of the procedures are now evident. While it would be corrected, it might be too late in the day to do so because time is of the essence.