MERALCO: LOPEZ NOT INTERESTED TO MEET WITH GSIS HEAD RE BUYOUT
MANILA, MAY 10, 2008 (STAR) By Marvin Sy - The patriarch of the Lopez family, which controls the Manila Electric Co., said he is not interested in meeting the head of the government pension fund for a possible buyout negotiation, even as Malacañang said it is keeping its hands off the issue.
Oscar Lopez, chairman of First Philippine Holdings Corp., ruled out a meeting with Government Service Insurance System (GSIS) president Winston Garcia on the possible sale of the Lopez stake in Meralco.
“I am not interested in meeting with Mr. Garcia at this point because there is nothing more to talk about. I refuse to be drawn into Mr. Garcia’s publicity game,” Lopez said in a statement. FPHC is the holding company for the Lopezes’ business interests including Meralco.
“If government thinks they can do a better job in Meralco, they can go ahead and buy us out. But looking at how Napocor has and is still being mismanaged, I have my doubts government can do a better job,” he said.
Lopez on Thursday said he was “sick and tired” of being pressured by the government to lower Meralco rates. Upon learning of Lopez’s statement, Garcia immediately announced he was willing to sit down – and possibly negotiate a buyout – with Lopez and other Meralco officials.
“As I said, I am sick and tired of being used as a convenient ploy to divert attention from other pressing problems of government. I stand by what I said,” Lopez said.
He also assailed Press Secretary Ignacio Bunye for raising the issue of transparency with Meralco’s refusal to open its books to Garcia.
“Meralco had been as transparent as the law requires us to be. If there is anything wrong at all it is the fact that Meralco is even over regulated,” Lopez said.
He said that aside from the Energy Regulatory Commission, the Securities and Exchange Commission and even the Commission on Audit are “going through all our books and transaction records all the time.”
“Our supply contracts are approved by the ERC and we cannot charge one centavo more than we have been authorized by ERC,” Lopez said.
“On the contrary, Meralco has even advanced billions of pesos in consumer subsidy, a large part of which remains uncollected today,” he added.
“Meralco, likewise, is one of the only utilities in the country that publishes its costs of purchased power from its various suppliers, including our own IPPs,” he said. IPP stands for independent power producers.
“As a listed issue, we are also in compliance with the transparency requirements of the Philippine Stock Exchange,” he pointed out.
“If government is serious in wanting to lower the rates of electricity distributed by Meralco, it will have to look into removing both the EVAT it imposes and the significantly large royalty it charges for Malampaya gas used by our IPP,” he said.
“We are one of the only countries that impose a huge tax on indigenous natural gas that is used by its own citizens,” he added.
At Malacañang, deputy presidential spokesperson Lorelei Fajardo said that the GSIS and the Lopez group should discuss a possible buyout deal among themselves since the Palace has no business in taking over private utilities.
“It is not the policy of this administration to take over the business of Meralco. In fact we are privatizing the GOCCs (government owned and controlled corporations),” Fajardo said.
“We have trust that GSIS will do what it can to protect the interests of the majority,” Fajardo said.
While Malacanang has repeatedly denied any plans to take over Meralco, Fajardo said that they would support any move that would be in the best interests of the people.
“It is the government’s thrust to ensure that our people will have affordable energy especially since prices of most basic commodities are soaring,” she said.
“Due to the complaints on the high cost of electricity, the Palace is supportive of GSIS’ take on the transparency of the books of Meralco,” Fajardo said. “The Palace will be supportive of measures that can best benefit our people.”
Repeal of law on systems loss sought
Two administration congressmen have filed separate bills seeking the repeal of the law that allows Meralco and other power distributors to recover systems loss from consumers.
In seeking the repeal of Republic Act 7832 or the anti-electricity pilferage law, Rep. Amado Bagatsing of Manila and Rep. Giorgidi Aggabao of Isabela said consumers should not be made to pay for the cost of electricity that is stolen or lost while in transit due to weather conditions or poor transmission.
Bagatsing said the law allows distributors to charge up to 9.5 percent of their system losses to customers. He described the law as “anti-poor.”
“Consumers have been hit hard as this component is a big percentage in their monthly bills,” he said.
But in newspaper ads, Meralco said its system loss charge accounts for roughly eight percent of its billing to customers.
“We now feel that distribution utilities have been unjust and unreasonable in continuously passing on their system losses to the consumers while they remain remiss in plugging pilferage,” he said.
Bagatsing and Aggabao said removing these charges would definitely bring down the cost of electricity.
“Enough is enough of the so-called systems loss charges that are raising to stratospheric levels the electricity bills of Meralco customers. This has the effect of class legislation, giving such distribution utilities to recover their loss by passing it on to consumers,” Bagatsing said.
More warnings vs takeover
Vice President Noli de Castro said it would be unwise for the government to take over Meralco or other private entities. “Let’s leave it to the private sector. Hindi dapat pumasok ang government dito (The government should not meddle in this). I’m not in favor of government running Meralco. And a buyout of the Lopez family’s share is not a wise decision,” De Castro told The STAR. De Castro used to be a top-rated broadcaster for ABS-CBN, a sister company of Meralco.
He said the President merely wants to lower the cost of power in the country to make it more appealing to investors.
But De Castro said Meralco should allow the opening of its financial records to Garcia in the interest of transparency.
Sen. Loren Legarda, for her part, asserted that the government should “generally” not meddle in the affairs of the private sector.
“Generally, we know that the private sector should be left to running businesses without government intervention,” Legarda said in an interview.
“That’s corporate struggle. At the end of the day, whoever runs it, be private or government sector, the interest of the public consumers should be the foremost concern,” Legarda said on the Meralco-GSIS spat.
For San Juan Mayor Joseph Victor Ejercito, the alleged takeover plan was meant to divert public attention from the worsening rice and food crisis.
“The Palace is trying to divert attention from the worsening rice crisis. After seven years and P145 billion people’s money spent, President Arroyo miserably failed to make the Philippines achieve food security and self-sufficiency,” Ejercito said. – with Jess Diaz, Delon Porcalla, Christina Mendez, Iris Gonzales, Pia Lee-Brago, Mayen Jaymalin, Mike Frialde, Jose Rodel Clapano
Chief News Editor: Sol Jose Vanzi
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