Kaltimex urged to comply with signed agreement

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BAGUIO CITY – The local government wants the management of Kaltimex Energy Philippines to first comply with its contractual obligations pursuant to the confirmed 25-year memorandum of agreement for the maintenance and operation of the city-owned Asin mini-hydro power plants before making demands from the city.

Mayor Mauricio G. Domogan said the best thing that Kaltimex can do is to review the confirmed contract and understand its obligations and not to look for excuses that delays their compliance with the said contract.

Under the confirmed agreement, Kaltimex is obliged to post a performance bond amounting to P150 million equivalent to 30 percent of the total rehabilitation cost of the power plants and pay the local government its first-year rental of P18 million within 6 months from the confirmation of the agreement.

The mayor called on Kaltimex management to fix their performance bond which was coursed through a bonding corporation whose address cannot be located in Manila to restore the trust and confidence of city officials on the sincerity of the company in implementing the maintenance and operation of the city-owned power plants.

Further, he called on Kaltimex management to also issue the necessary special power of attorney to Rodrigo Cabrera, their alleged consultant, so that he will have the personality to represent the company in talking to city officials regarding important issues and concerns on company plans for the implementation of the provisions of the agreement to make the city-owned power plants operational.

He admitted he is beginning to doubt the sincerity of Kaltimex officials in dealing with the local government, especially in complying with the provisions of the confirmed agreement so that the power plants will be operational within the next three years pursuant to the agreement.

Baguio City owns the distinction of owning renewable energy plants which was turned over to the local government by the Americans after leaving the city.

He appreciated the earlier commitment of Kaltimex that it will comply with its obligations under the agreement but he again received a separate communication from the company stating, among others, imposing certain conditions and requesting the deferment of the payment of its first year rental due to alleged failure of the local government to peacefully turn over the property to the company.

He explained he is confused on the conflicting contents of the separate letters sent by Kaltimex to the city over the past several weeks that is why he wants to clarify the company’s interested in pursuing the agreement to maintain and make operational the mini-hydro power plants within the agreed 3-year period.

In 2012, the operation of the Asin mini-hydro power plants was stopped by the Energy Regulatory Commission after the city government failed to secure the required certificate of compliance from the regulatory body for its continued operation, thus, the city was constrained to bid out the maintenance and operation of the power plants until the Special Bids and Awards Committee (SBAC) awarded to Kaltimex the right to maintain and operate the plants for a 25-year period. By Dexter A. See

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