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Philippine Power Plant

Napocor pay ‘plot’ bared
Wednesday, September 29, 2004

State firm’s execs gave selves a raise to boost retirement pay
By Sammy Martin , Correspondent

The practice of National Power Corp. officials of raising their salaries just before they retired so they could be entitled to bigger benefits came to light at a Senate inquiry Friday.
The Senate Committee on Energy was so outraged by the disclosure that it ordered Rogelio Murga, who had just resigned as Napocor president, to submit documents detailing the salaries and wages of Napo­cor officials.
“I do not have the copy of the salaries and wages of retired Napocor officials, but we will furnish you a copy in the next hearing,” Murga told the com­mittee, chaired by Sen. Miriam Defensor Santiago.
In past congressional hearings Energy Secretary Vince Perez had said the government spent P12 billion to retire officials and personnel of Napocor, but that most of them were rehired after they got huge retirement benefits.

“I was informed that you [Napocor officials] almost doubled your salaries before you decided to retire yourselves, and had the nerve to ask the government to shoulder your losses,” Sen. Sergio Osmeña 3rd told Murga.

Osmeña said Murga had signed a memorandum ordering the mass increase of salaries of Napocor executives so that they could claim huge sums when they retired.

Sen. Joker Arroyo, vice chair of the committee, said Napocor officials have no right to raise salaries and wages, because the corporation is losing heavily.

Arroyo learned that the P12 billion Napocor spent for separation pay was borrowed from a government financial institution and drawn from the corporation’s internal cash fund.

Murga tried to persuade the Senate committee that the country would face a severe power shortage in the next three years if the government did not allow independent power producers (IPPs) to provide additional electricity.

Sen. Rodolfo Biazon said he could not understand how in spite of having more than a 15,000-megawatt power supply, and with demand only 9,000 megawatts, the country was about to go through a power crisis.

“We have a surplus of 6,000 megawatts; that is why I cannot understand the basis of the government’s announcement that we could suffer a power shortage as early as within three years,” he said.

Talking to reporters after the hearing, Biazon said Perez apparently wants to speed up a contract that would again retain the services of IPPs for a 200-megawatt plant.

“I cannot understand which is true,” Biazon said. “It’s either that the energy managers of our country do not understand the real situation or that they are again pulling our leg so that we may again not question an
attempt to enter into a series of contracts with IPPs.”

He said the government pays the IPPs although they do not deliver the power stipulated in their contracts.
Santiago said she doubts if Congress will allow the sale of Transmission Co., an attached agency of Napocor that was reportedly earning more than P16 billion annually.

“It is not appropriate to sell an asset which earned a lot of money for the government unlike Napocor, which is tremendously losing money,” she said.

Santiago said the committee is not persuaded that Napocor must raise its rates to recover the losses it ran up in the past.

She cited the contracts signed by the Ramos administration with the IPPs which allowed them to collect the full amount although they were not supplying the power specified in the contract.

“The members of the Senate Committee on Energy expressed skepticism that Napocor is correct when it claims that it has to raise electricity rates because in the past it was compelled by the Energy Regulatory Commission to artificially reduce its rates,” she said.

The then-President Fidel V. Ramos signed additional IPP contracts months before he ended his term in 1998, in spite of a power surplus, Santiago said.

posted by philpower @ 1:18 PM,




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