LUZON OUTAGES TO COST MORE THAN P81 BILLION  IF NOTHING DONE NEXT YEAR

OCT 7 ---Time is running out for Luzon as the specter of a power shortage threatens the country’s center of commerce, which contributes the lion’s share of the country’s yearly gross domestic product, an administration lawmaker warned on Monday. Valenzuela City Rep. Sherwin Gatchalian urged the government to speed up measures to solve next year’s imminent power crisis, saying the country stands to lose more than P80 billion if no remedial measures are put in place by the end of October. “According to our rough estimates, the country will lose P81.6-billion in potential income from production in Luzon next year if the government, especially Congress, does not come up with an immediate solution to avert the crisis,” said Gatchalian, a senior vice chair of the House committee on Metro Manila development.

The lawmaker said the projected income loss in Luzon is equivalent to 1.2 percent of last year’s real GDP of P6.76 trillion. Gatchalian emphasized that “timing is crucial” as Congress will convene only from Oct. 20 to 31, meeting only from Monday to Wednesday for the plenary session. Both Houses will go on a break for All Saints’ Day and All Souls’ Day. “The Legislative branch must prioritize the resolution of the power crisis, either by granting the President emergency powers for the lease or purchase of power generators, or by tapping private establishments through the Interruptible Load Program,” he said. * READ MORE...

ALSO by Boo Chanco: Is Binay good for business?  

OCT 13 --Since I am writing a business column, I think it is interesting to decipher how the business community will react to a Binay presidency. We do these “what if” scenario building all the time and I am sure many business leaders are now doing their what if... what if Binay moves to Malacañang?  First of all, there may be a need to distinguish between the Makati business crowd and the ordinary business person beyond the corporate world. In the corporate business world, the major shareholders and the college educated staff are expected to share the value of good governance. It is not necessarily so. The corruption issues against Jojo Binay in recent days are starting to make people think or rethink their positions on a Binay presidency.

But unfortunately, good governance is truly important mostly among the middle class, not necessarily the taipans and captains of industry despite what they say in public. The taipans and the big traditional business families make pragmatic bets. If they feel they need to be in the good graces of Jojo B, they will go out of their way to make sure it is so as early as possible. I wouldn’t be surprised if a lot of meetings and dinners are already going on between Jojo B and the business elite. Indeed, the bluest of the blue chips of Makati business, the Ayalas, managed to live quite profitably through the last 18 years with Jojo B. They have enough goodwill capital with the former Makati mayor to give them a head start in a Binay presidency than say, the Aboitizes.

I asked an economist colleague of mine how he thought the business community will react to a Binay presidency. Here are some of his thoughts:  “I think it depends on who businessman you ask. I think MVP, San Miguel, and the Sys wouldn’t be unhappy. Probably a number in MBC would be. The businessmen in the wood industry and the mining industry hate PNoy and the Daang Matuwid party. They can’t wait for PNoy to finish his term. “The foreign investors who deal with Lilia de Lima don’t care who’s the president as long as they have Lilia. “There’s some legitimate fear that crony capitalism will be back with a Binay presidency.

However, if you examine his record in running the housing agencies, especially Pag-ibig under Darlene Berberabe, these are very professionally run. Compare that to the time under Noli de Castro. “There’s also a good chance that under a Binay presidency, the NFA monopoly may finally be dismantled since there are no rice farmers in Makati. Both GMA and PNoy hail from rice-producing regions and they have generally been very protective of the rich rice farmers and rice cartel…”  * READ MORE...

ALSO: PAL TO LEASE NEW PLANES; PAL, formerly a lessee, is now a lessor.  

OCT 7 ---Philippine Airlines has reversed its way of maximizing revenues.
Convinced that a small fleet of aircraft would make it difficult for the national flag
carrier to survive and make a profit, it has turned to leasing planes to other airlines to increase its flights to profitable destinations. PAL, formerly a lessee, is now a lessor. After the Lucio Tan Group bought back the 49 percent equity sold to San Miguel Corp. for $500 million, the national flag carrier found itself with too many new aircraft bought by the management of Ramon S. Ang. Jaime C. Bautista, returning president of the airline, has started negotiating with three airlines in Europe for the lease of the unused new aircraft.

He also said the airline might ask Airbus Industrie for deferment of delivery and payment. Ang organized Fortunate Star Holdings precisely to lease the new aircraft bought from Airbus Industrie of France. The leasing company is owned 40 percent by PAL; 20 percent SMC and 40 percent by Ang. Before he could do much about it, the Lucio Tan Group bought SMCs 49 percent stake in the airline. By the end of the year, PAL would complete taking delivery of 30 Airbus aircraft. The management of Ang contracted to buy 60 new aircraft. Under the agreement with the supplier, 10 more airplanes are to be delivered by next year. Another 10 will be delivered in 2016. The remaining 10 be turned over to PAL, now under the Lucio Tan Group management, by the end of 2016.

The new fleet of 60 brand-new aircraft is estimated to cost PAL at least $6 billion, a sum that appears difficult to pay considering the present overall load factor of 65 percent. The break-even load factor is at least 70 per cent. Ang convinced the board controlled by the Tan Group to buy more brand new planes to be used two ways, to fly passengers to additional destinations or lease them to other airlines which do not have enough aircraft. The new management of PAL is pushing the leasing idea obviously because it does not as yet have enough passengers to fly to new destinations. If it can have its way, PAL will lease its new aircraft under what is known as “wet lease agreement.” This pact requires PAL to use its pilots, crews and other personnel in the air for the account of the lessee. If this plan is accepted by the lessee, PAL may have to hire more personnel. On the other hand, the lessee is not burned by additional payroll cost. The “dry lease,” on the other hand, provides all personnel and presumably pays the lessor a smaller amount. * READ MORE...

ALSO: NAIA still among world’s worst  

OCT 8 ---With its poor facilities, long queues and “impolite” staff and officials, the Ninoy Aquino International Airport (NAIA) was again ranked as one of the world’s 10 worst airports. An ANC report said the ranking was made by US website The Cheat Sheet, which held that the airport – designed for six million passengers – is unsurprisingly unable to accommodate more than 32 million people who use its facilities every year. “This Manila-based airport struggles with the 32 million passengers who use its facility each year. That shouldn’t come as a shock, though, considering it only has the capacity for six million passengers, according to CNBC,” it said.

Travelers have complained of discourteous airport staff despite the Filipinos’ being known for their hospitality. But The Cheat Sheet said ongoing upgrades and renovations at the NAIA provide the “good news.” NAIA earned the notoriety of being one of the worst airports in the world in 2013 based on a survey by travel website Sleeping In Airports. The website asked travelers to rank airports based on comfort, conveniences, cleanliness and customer service. The government earlier said it hopes to complete the NAIA upgrade in April next year and appealed to the public for understanding while renovation is in progress. The Cheat Sheet’s list also includes Charles De Gaulle in Paris, Los Angeles International Airport, Italy’s Bergamo Orio al Serio Airport, New York’s LaGuardia Airport, Zurich International in Switzerland, Chad’s N’Djamena International Airport, Russia’s Moscow Sheremetyevo Airport, Bill and Hillary Clinton National Airport in Arkansas, and India’s Calcutta Netaji Subhash Chandra Bose International Airport.THIS IS THE FULL REPORT

Energy Crisis: Noy prods Congress to give him emergency powers 

OCT 12 --President Aquino poses for a ‘group selfie’ with reporters during coffee with media at Nusa Hotel Resort and Spa in Bali, Indonesia last Friday. BALI, Indonesia – President Aquino has prodded Congress to immediately grant him emergency powers to address the looming power crisis, saying lawmakers will bear the brunt of the blame if blackouts hit Luzon in summer 2015. The President renewed his call to Congress on Friday as members of the Senate and House of Representatives continue to deliberate on the proposed joint resolution granting him emergency powers under Section 71 of the Electric Power Industry Reform Act (EPIRA).

The EPIRA bars the government from engaging in power generation, and lawmakers are skeptical of Energy Secretary Jericho Petilla’s projections on the extent of the power shortage. But Aquino said Petilla committed in their last meeting that he would exert all efforts to secure congressional approval of the resolution. “Am I confident it (joint resolution) will pass? I think so. At the end of the day, if brownouts will come next year and we don’t have power, who among the lawmakers will want to be remembered as not approving (the resolution)?” Aquino told reporters here. “If you’re going to pass it, pass it as soon as possible because it’s better if we have more time to address this issue,” the President added. Petilla has been insisting that the government enter into negotiated contracts to lease diesel-run power barges that is expected to cost up to P12 billion in taxpayers’ money. Aquino said the government needs at least six months to negotiate for the lease, transport and installation of power barges from abroad. The installation would also require civil works, such as installation of pipes and fuel tanks. * READ MORE...

ALSO Philstar Opinion: Of lies and deceptions

OCT 12 --These people probably think that we are a bunch of stupid people who will fall for their versions of the story hook, line and sinker. All they do is tell a bunch of lines, or simply shrug their shoulders and feign innocence in the hope that the Filipino people, known for being able to forgive and move on with their lives though their rights have been trampled upon, will move on to the next chapter. Executives of the Department of Transportation and Communications (DOTC) continue to blame others, except themselves and their partners in crime, for the never-ending woes of our country’s pride: the Metro Rail Transit Line 3. Consensus was reached in a recent Senate hearing that the lasting solution to the MRT3 woes is for the private sector to fully operate it.

The DOTC’s P54-billion Equity Value Buyout (EVBO) simply will not work because the amount will only be enough for government to purchase the MRTC bonds owned by two state-run banks and there won’t be money left to acquire a single coach. Sen. Sergio Osmeña III even wants the DOTC to accept what he called the “perfect offer” of the Metro Pacific Investment Corp. (MPIC), an MRTC stakeholder, to take over MRT3. DOTC Secretary Joseph Abaya and his underlings at the DOTC, Light Rail Transit Authority (LRTA) and MRT continue to muddle issues to make our legislators believe that private partner MRT Corp. (MRTC) and the MRTC-picked original operations and maintenance (O&M) contractor Sumitomo Corp. are to blame for MRT3’s sorry state and that only a 100 percent government takeover can save it. * READ MORE...


READ FULL MEDIA REPORTS HERE:

Luzon outages to cost P81b

MANILA, OCTOBER 13, 2014 (MANILA STANDARD) By Maricel Cruz - Time is running out for Luzon as the specter of a power shortage threatens the country’s center of commerce, which contributes the lion’s share of the country’s yearly gross domestic product, an administration lawmaker warned on Monday.

Valenzuela City Rep. Sherwin Gatchalian urged the government to speed up measures to solve next year’s imminent power crisis, saying the country stands to lose more than P80 billion if no remedial measures are put in place by the end of October.

“According to our rough estimates, the country will lose P81.6-billion in potential income from production in Luzon next year if the government, especially Congress, does not come up with an immediate solution to avert the crisis,” said Gatchalian, a senior vice chair of the House committee on Metro Manila development.

The lawmaker said the projected income loss in Luzon is equivalent to 1.2 percent of last year’s real GDP of P6.76 trillion.

Gatchalian emphasized that “timing is crucial” as Congress will convene only from Oct. 20 to 31, meeting only from Monday to Wednesday for the plenary session. Both Houses will go on a break for All Saints’ Day and All Souls’ Day.

“The Legislative branch must prioritize the resolution of the power crisis, either by granting the President emergency powers for the lease or purchase of power generators, or by tapping private establishments through the Interruptible Load Program,” he said.

* If Congress will comply with the Executive’s request for emergency powers in accordance with the Electric Power Reform Industry Act (EPIRA), both houses will have to immediately pass a joint resolution for the granting of such because the purchase or lease requires at least three months. There is a 200 MW-deficit but the Energy secretary recommended an additional capacity of 500 MW as buffer in case the shortage becomes bigger.

In the other option favored by the House, business establishments will get incentives to generate their own power.

Speaker Feliciano Belmonte Jr. has filed a resolution directing the House committee on energy to probe the need for additional generating capacity.

Belmonte maintained that Congress would only grant a special power to the President if Palace officials and the Energy department were able to justify the need for it.

FROM PHILSTAR

Is Binay good for business? DEMAND AND SUPPLY By Boo Chanco (The Philippine Star) | Updated October 13, 2014 - 12:00am 0 9 googleplus0 0


Boo Chanco

Since I am writing a business column, I think it is interesting to decipher how the business community will react to a Binay presidency. We do these “what if” scenario building all the time and I am sure many business leaders are now doing their what if... what if Binay moves to Malacañang?

First of all, there may be a need to distinguish between the Makati business crowd and the ordinary business person beyond the corporate world. In the corporate business world, the major shareholders and the college educated staff are expected to share the value of good governance. It is not necessarily so.

The corruption issues against Jojo Binay in recent days are starting to make people think or rethink their positions on a Binay presidency. But unfortunately, good governance is truly important mostly among the middle class, not necessarily the taipans and captains of industry despite what they say in public.

The taipans and the big traditional business families make pragmatic bets. If they feel they need to be in the good graces of Jojo B, they will go out of their way to make sure it is so as early as possible. I wouldn’t be surprised if a lot of meetings and dinners are already going on between Jojo B and the business elite.

Indeed, the bluest of the blue chips of Makati business, the Ayalas, managed to live quite profitably through the last 18 years with Jojo B. They have enough goodwill capital with the former Makati mayor to give them a head start in a Binay presidency than say, the Aboitizes.

I asked an economist colleague of mine how he thought the business community will react to a Binay presidency. Here are some of his thoughts:

“I think it depends on who businessman you ask. I think MVP, San Miguel, and the Sys wouldn’t be unhappy. Probably a number in MBC would be. The businessmen in the wood industry and the mining industry hate PNoy and the Daang Matuwid party. They can’t wait for PNoy to finish his term.

“The foreign investors who deal with Lilia de Lima don’t care who’s the president as long as they have Lilia.

“There’s some legitimate fear that crony capitalism will be back with a Binay presidency. However, if you examine his record in running the housing agencies, especially Pag-ibig under Darlene Berberabe, these are very professionally run. Compare that to the time under Noli de Castro.

“There’s also a good chance that under a Binay presidency, the NFA monopoly may finally be dismantled since there are no rice farmers in Makati. Both GMA and PNoy hail from rice-producing regions and they have generally been very protective of the rich rice farmers and rice cartel…”

* That sounds pretty much like the seemingly pro Binay memo from a foreign investment management firm that I wrote about last Friday. If we are just talking business movers and shakers, Jojo B understands what makes them happy better than even P-Noy. He has had years of practice doing that in Makati.

Non-corporate business folks, on the other hand, will mirror the sentiments in their local communities. Most of them are small and medium scale business owners and they are probably more susceptible to a Binay pitch, just like the masa in their communities.

The Makati executives and professionals, the middle class folks who led the yellow rain on Ayala Avenue that precipitated EDSA 1 are revolted by the idea of a Binay presidency. Most of them only work in Makati so no ties bind them to Binay’s welfare state benefits. Recent headlines on corruption in Binay’s Makati only heighten their revulsion to the idea of a Binay presidency.

Curious to know how Binay interacts with the Makati Business moguls, I googled and found a speech he delivered before the MBC last year. It is clear from this speech that he knows what the MBC types want to hear. Here are snippets from that speech:

“I distinctly recall meeting with a group of businessmen early in my term, where I made one simple promise: I will focus only on governance, and I will not meddle in business. I will work to provide the atmosphere for business to grow, but you must do your share in supporting the government, by among others, paying your taxes.

“And this is what I think we should do next for the country — enhance and strengthen the economic fundamentals that we have achieved. We must continue to expand our tax base, not by higher taxes, but by improving compliance and collection; continue to reduce, lengthen and spread our maturing liabilities to avoid disruptive fiscal bumps, raise infrastructure spending from the current two percent of our GDP to a truly progressive five percent of GDP; liberalize foreign investment restrictions to make the Philippines and Philippine enterprises more globally competitive and provide the Filipino consumer cheaper and more affordable products…

“We must cure the policy and infrastructure misalignments that emerge as we cascade down our gains. In tourism for example, a true open skies policy with an aggressive airport development program has to be undertaken…

“We must take a look at the inefficiencies of the agriculture supply chain that allow as many as eight layers of middlemen to deprive the Filipino farmer the full value of their produce.”

I asked an economist in one of my e-groups what he thought of a Binay vs Mar 2016 match-up. This is his reply:

Mar will be worse than Typhoon Yolanda. A few years back when he was planning to run for the presidency, he invited some of us to a meeting in Manila Golf Club. He was trying to convince us to support his plan to eliminate the VAT on oil, the impact on public finance be damned because it will get him “pogi” points. I demurred, although I had known Mar way back.

As for Binay, I agree that these corruption allegations are serious and shouldn’t be brushed aside. I don’t condone corruption, but I can speak as a resident of Makati.

Last year, Magallanes Village was inundated after a heavy rainfall. The village walls broke and water rushed into our village. Our house was flooded with about three feet of water. Outside the water was chest deep. We had to be rescued since there was no electricity.

I called up the barangay chairman and he sent a boat to rescue us. We also saw Mayor Jun Jun Binay in the village with an amphibious rescue vehicle helping with the rescue operations.

Days after, the barangay contacted us and advised us to take antibiotics against the possibility of leptospirosis. We went to the barangay and were given antibiotics for free with the barangay doctor administering it on the spot.

Another time, my wife suffered an attack of vertigo while I wasn’t home. I called up the barangay chairman and he immediately dispatched an emergency team to pick up my wife.

My former maid got sick of kidney disease. Fortunately, she had a yellow card. She run up a bill of half a million pesos, but she didn’t pay a single centavo. My driver got a stroke recently. His family brought him to OsMak and treatment was free. So too for the driver of my sister, who contracted dengue and didn’t have to pay a thing.

Even on Saturdays, the barangay office, including the clinic, remains open to offer services to the residents. I don’t have to worry too much about my household help getting sick and I have to personally pay for their medical and other needs.

So there. Call me uneducated, but the government works for me in my tiny village in Makati. It’s not the birthday cake, the P1,000 every six months for senior citizens, and the free movies.

You may say that Binay has nothing to do with the prosperity of Makati. I don’t care. My wife doesn’t care. All we see is the service we are getting as residents of Makati. At least we see some of that prosperity trickling down. Narrow-minded, maybe, but I’m just relating to you my personal experience.

Wow! This non-Makati resident can’t help feeling envious. Hoy Bistek… sana ganyan din tayo sa kyusi!

Well, I guess it is wrong to say Binay is only a masa phenomenon. But I still think Jojo B has to respond to the corruption charges being hurled against him in a less legalistic manner. He must worry about the court of public opinion too. I am too middle class not to be scandalized by those corruption reports.

Binay must reassure us he is not a kleptocratic clone of Marcos. That 9000 percent overprice on OsMak’s autoclave is too shocking not to be fully refuted. Jojo, tell us it isn’t true!

FROM MALAYA

PAL TO LEASE NEW PLANES By Amado P. Macasaet | October 07, 2014

Philippine Airlines has reversed its way of maximizing revenues. Convinced that a small fleet of aircraft would make it difficult for the national flag carrier to survive and make a profit, it has turned to leasing planes to other airlines to increase its flights to profitable destinations.

PAL, formerly a lessee, is now a lessor.

After the Lucio Tan Group bought back the 49 percent equity sold to San Miguel Corp. for $500 million, the national flag carrier found itself with too many new aircraft bought by the management of Ramon S. Ang.

Jaime C. Bautista, returning president of the airline, has started negotiating with three airlines in Europe for the lease of the unused new aircraft. He also said the airline might ask Airbus Industrie for deferment of delivery and payment.

Ang organized Fortunate Star Holdings precisely to lease the new aircraft bought from Airbus Industrie of France. The leasing company is owned 40 percent by PAL; 20 percent SMC and 40 percent by Ang. Before he could do much about it, the Lucio Tan Group bought SMCs 49 percent stake in the airline.

By the end of the year, PAL would complete taking delivery of 30 Airbus aircraft. The management of Ang contracted to buy 60 new aircraft. Under the agreement with the supplier, 10 more airplanes are to be delivered by next year. Another 10 will be delivered in 2016. The remaining 10 be turned over to PAL, now under the Lucio Tan Group management, by the end of 2016.

The new fleet of 60 brand-new aircraft is estimated to cost PAL at least $6 billion, a sum that appears difficult to pay considering the present overall load factor of 65 percent. The break-even load factor is at least 70 per cent.

Ang convinced the board controlled by the Tan Group to buy more brand new planes to be used two ways, to fly passengers to additional destinations or lease them to other airlines which do not have enough aircraft.

The new management of PAL is pushing the leasing idea obviously because it does not as yet have enough passengers to fly to new destinations.

If it can have its way, PAL will lease its new aircraft under what is known as “wet lease agreement.” This pact requires PAL to use its pilots, crews and other personnel in the air for the account of the lessee.

If this plan is accepted by the lessee, PAL may have to hire more personnel. On the other hand, the lessee is not burned by additional payroll cost.

The “dry lease,” on the other hand, provides all personnel and presumably pays the lessor a smaller amount.

* Ang secured additional landing rights in the United States and Europe after the US Federal Aviation Administration elevated the category of the Ninoy Aquino International Airport from Category II to Category 1.

Airlines in the United States and Europe find airports in Category II as unsafe.

The heavy concentration on international operations left PAL playing second fiddle to Cebu Pacific which now claims to account for about 55 percent of total domestic passengers.

PAL’s domestic fares are markedly higher than Cebu Pacific’s, its principal competitor. The airline company of taipan John Gokongwei has secured a few landing rights abroad. Most of its aircraft are second hand with new engines.

It is in this area where PAL hopes to fight Cebu Pacific in addition to the hope of making profits leasing brand new aircraft.

FROM PHILSTAR

NAIA still among world’s worst (The Philippine Star) | Updated October 8, 2014 - 12:00am 0 0 googleplus0 0

MANILA, Philippines - With its poor facilities, long queues and “impolite” staff and officials, the Ninoy Aquino International Airport (NAIA) was again ranked as one of the world’s 10 worst airports.

An ANC report said the ranking was made by US website The Cheat Sheet, which held that the airport – designed for six million passengers – is unsurprisingly unable to accommodate more than 32 million people who use its facilities every year.

“This Manila-based airport struggles with the 32 million passengers who use its facility each year. That shouldn’t come as a shock, though, considering it only has the capacity for six million passengers, according to CNBC,” it said.

Travelers have complained of discourteous airport staff despite the Filipinos’ being known for their hospitality.

But The Cheat Sheet said ongoing upgrades and renovations at the NAIA provide the “good news.”

NAIA earned the notoriety of being one of the worst airports in the world in 2013 based on a survey by travel website Sleeping In Airports.

The website asked travelers to rank airports based on comfort, conveniences, cleanliness and customer service.

The government earlier said it hopes to complete the NAIA upgrade in April next year and appealed to the public for understanding while renovation is in progress.

The Cheat Sheet’s list also includes:
Charles De Gaulle in Paris,
Los Angeles International Airport,
Italy’s Bergamo Orio al Serio Airport,
New York’s LaGuardia Airport,
Zurich International in Switzerland,
Chad’s N’Djamena International Airport,
Russia’s Moscow Sheremetyevo Airport,
Bill and Hillary Clinton National Airport in Arkansas, and ...
India’s Calcutta Netaji Subhash Chandra Bose International Airport.

FROM PHILSTAR

Noy prods Congress to give him emergency powers By Paolo Romero (The Philippine Star) | Updated October 12, 2014 - 12:00am 3 9 googleplus0 0


President Aquino poses for a ‘group selfie’ with reporters during coffee with media at Nusa Hotel Resort and Spa in Bali, Indonesia last Friday.

BALI, Indonesia – President Aquino has prodded Congress to immediately grant him emergency powers to address the looming power crisis, saying lawmakers will bear the brunt of the blame if blackouts hit Luzon in summer 2015.

The President renewed his call to Congress on Friday as members of the Senate and House of Representatives continue to deliberate on the proposed joint resolution granting him emergency powers under Section 71 of the Electric Power Industry Reform Act (EPIRA).

The EPIRA bars the government from engaging in power generation, and lawmakers are skeptical of Energy Secretary Jericho Petilla’s projections on the extent of the power shortage.

But Aquino said Petilla committed in their last meeting that he would exert all efforts to secure congressional approval of the resolution.

“Am I confident it (joint resolution) will pass? I think so. At the end of the day, if brownouts will come next year and we don’t have power, who among the lawmakers will want to be remembered as not approving (the resolution)?” Aquino told reporters here.

“If you’re going to pass it, pass it as soon as possible because it’s better if we have more time to address this issue,” the President added.

Petilla has been insisting that the government enter into negotiated contracts to lease diesel-run power barges that is expected to cost up to P12 billion in taxpayers’ money.

Aquino said the government needs at least six months to negotiate for the lease, transport and installation of power barges from abroad. The installation would also require civil works, such as installation of pipes and fuel tanks.

* He noted that the power situation in the country was complicated and cannot be completely solved by simply leasing power barges, adding the youngest power plant in Luzon is about 14 years old. He also called for other measures to mitigate the expected power shortage such as the Interruptible Load Program (ILP) and shifting the peak hours of power use of commercial establishments and industries.

Lawmakers, however, pointed out there is still no clear and convincing data from Petilla that there would indeed be a power crisis in Luzon next summer and that his projections vary wildly from 300 megawatts to 1,200 MW.

They also questioned Petilla’s insistence on leasing power barges that they said was “grossly expensive” as they would be used only a few hours a day during the peak summer months and yet the lease contracts would span up to two years.

Lawmakers noted that the ILP, where the government will compensate large commercial and industrial establishments for temporarily disconnecting from the grid and use their own embedded power during peak hours, would cost only P200 million at most.

Earlier, Isabela Rep. Rodolfo Albano III said based on a report submitted to the House committee on energy by the National Grid Corp. of the Philippines, there would be sufficient power supply and even a “system gross reserve” for the whole of 2015.

He said the report shows that available power for Luzon for next year would range from 8,839 MW in January to 10,946 MW in December.

Bayan Muna Reps. Neri Colmenares and Carlos Zarate also asked why the committee, chaired by Mindoro Oriental Rep. Reynaldo Umali, has been holding meetings of his technical working group when it is yet to conduct a single public hearing on the joint resolution.

They scored Umali, who belongs to the administration’s Liberal Party, for giving the impression that the resolution would be approved with Petilla’s recommendation to lease expensive power barges intact.

“We oppose emergency powers for President Aquino precisely because not only has Secretary Petilla failed to prove the claimed lack of supply, but also because this short-sighted band aid solution will increase the cost of electricity and will not assure stable energy supply. We need long-term solutions, not short-term magic tricks,” they added. – With Aurea Calica, Marvin Sy

Of lies and deceptions HIDDEN AGENDA By Mary Ann Ll. Reyes (The Philippine Star) | Updated October 12, 2014 - 12:00am 0 3 googleplus0 0


By Mary Ann Ll. Reyes

These people probably think that we are a bunch of stupid people who will fall for their versions of the story hook, line and sinker.

All they do is tell a bunch of lines, or simply shrug their shoulders and feign innocence in the hope that the Filipino people, known for being able to forgive and move on with their lives though their rights have been trampled upon, will move on to the next chapter.

Executives of the Department of Transportation and Communications (DOTC) continue to blame others, except themselves and their partners in crime, for the never-ending woes of our country’s pride: the Metro Rail Transit Line 3.

Consensus was reached in a recent Senate hearing that the lasting solution to the MRT3 woes is for the private sector to fully operate it.

The DOTC’s P54-billion Equity Value Buyout (EVBO) simply will not work because the amount will only be enough for government to purchase the MRTC bonds owned by two state-run banks and there won’t be money left to acquire a single coach.

Sen. Sergio Osmeña III even wants the DOTC to accept what he called the “perfect offer” of the Metro Pacific Investment Corp. (MPIC), an MRTC stakeholder, to take over MRT3.

DOTC Secretary Joseph Abaya and his underlings at the DOTC, Light Rail Transit Authority (LRTA) and MRT continue to muddle issues to make our legislators believe that private partner MRT Corp. (MRTC) and the MRTC-picked original operations and maintenance (O&M) contractor Sumitomo Corp. are to blame for MRT3’s sorry state and that only a 100 percent government takeover can save it.

* In fact, Abaya and his factotums like Undersecretary Jose Perpetuo Lotilla have had no qualms about throwing red herrings—such as baring plans to sue MRTC for an illusory breach of contract or unduly accusing Sumitomo Corp. of cannibalizing train parts prior to its unceremonious replacement by PHTrams and, later, APT-Global, just to take Senate and House probers off the scent of DOTC-style corruption and mismanagement that place over a half-million MRT3 passengers in harm’s way on a daily basis.

Despite these distractions though, our legislators have been able to uncover DOTC’s rejection of all five proposals by its supposed private partner to buy additional light rail vehicles (LRVs) at no cost to the government—the first four by MRTC from 2000 to 2007, and the fifth one by the Metro Pacific Investment Corp. (MPIC) in 2011 after it bought into this rail system via a cooperation agreement with the Fil-Estate Group that controls MRT Holdings Corp. (MRTH), which, in turn, owns MRTC.

As regards the private owners’ capacity expansion proposals, Osmeña said that the best available solution at the moment is for the DOTC to ditch its takeover plan and instead accept the 2011 proposal of MPIC.

According to Osmena, the only way to get out of management without going to court is to negotiate the MPIC offer, adding that (chairman) Manny V. Pangilinan is a professional manager and business entrepreneur and that It’s a perfectly good offer.

MPIC offered to take over MRT3 in 2011 when it bought into the MRTC that year via a cooperation deal with Bob Sobrepeña’s Fil-Estate Group. Media reports have bared that MVP had offered to take over MRT3 in exchange for procuring $300 million-worth of additional trains and buying another $350 million equity in MRTC.

Osmeña’s support for the MPIC proposal makes sense, given the sterling record of MVP and his group of companies in making profit centers out of private and public facilities such as Meralco, Maynilad, PLDT, Philippine Long Distance Co. (PLDT), Smart, Philex Mining, and Metro Pacific Tollways Corp. (MPTC).

Letting MPIC run MRT3 will be like throwing fish into water, given its current partnership with the Ayala Corp. on the DOTC-awarded P1.088-billion Automated Fare Collection System (AFCS) for MRT3 and the P65-billion extension of the Light Rail Transit Line 1 (LRT1) to Cavite.

Abaya and his deputies would do commuters and all taxpayers as well a lot of good by considering this game-changing proposal of Osmeña.

Now, back to the congressional investigations and the things that our legislators have so far unravelled:

– That the DOTC has virtually taken over MRT3’s maintenance when it dumped Sumitomo Corp. on short notice in 2012 and then awarded without the benefit of public bidding and under suspicious circumstances the interim contract to PH Trams and, later, to APT Global.

– That DOTC executives lied in justifying the summary termination of Sumitomo on grounds that the latter refused to offer any financial warranty to continue operating MRT3 and even demanded an O&M fee to run the rail system that was much higher than those eventually awarded in succession to the PH Trams-CB&T and APT Global consortiums. It turns out that Sumitomo had provided financial guarantees under its O&M contract;

– That in contrast, the subsequent contract fees charged by the PH Tram and APT Global might have appeared cheaper than the one asked by Sumitomo in 2012 because the DOTC had split the O&M caboodle into “chop-chop” contracts minus any financial guarantee or warranty as claimed by Abaya before the subcommittee. APT Global executive Vic Espiritu admitted that his firm’s contract did not have a warranty clause as their O&M deal did not require them to financially guarantee their work. This was because their contract only covered the labor component as the DOTC was in charge of supplying the spare parts.


Chief News Editor: Sol Jose Vanzi

© Copyright, 2014 by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved


PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE