Scrap IPP deals to disprove Meralco takeover plan, Palace dared
Monday, January 23, 2006
By Angie M. Rosales
An opposition lawmaker yesterday challenged Malacañang to scrap the purportedly onerous power firm deals signed during the Ramos administration to support its claims that the government is not keen on taking over Manila Electric Co. (Meralco) in alleged preparation for President Arroyo’s declaration of emergency rule.
According to Sen. Sergio Osmeña III, the government’s assurance to electric consumers of more affordable rates would only materialize should there be a scrapping of what he called as “high-priced” independent power producer (IPP) deals that the National Power Corp. (Napocor) signed during the Ramos administration, instead of the aborted government plan to take over Meralco.
He issued the challenge amid reports over the alleged impending emergency rule, part of it supposedly will have Mrs. Arroyo ordering a government takeover of Meralco for a period anywhere from 12 to 18 months to make the Lopez group, along with its media empire, toe the Malacañang line.
Documents obtained by the Tribune showed that businessmen supposedly supportive of Mrs. Arroyo have given their nod to the idea which will serve as a model for the seizure of other vital industries to enable the President bring down the prices of electricity, water, transportation and even the food business.
Osmeña made the suggestion even after Energy Secretary Rafael Lotilla claimed the government was not really keen to take over the Lopez-family controlled power company.
Lotilla, in a statement, however, said the Department of Energy simply wanted to ensure affordable electricity rates for all consumers, including those in the Meralco franchise area.
“Unfortunately, it is the government, through the Napocor, that signed the IPP deals which jacked up the electricity rates that are reflected in the monthly electric bills of Meralco consumers,” the lawmaker said, adding Napocor just added on the cost of these IPPs deals in the Meralco bills.
If government were really serious in easing the burden of electric consumers, Osmeña stressed, it could start by immediately renegotiating for better deals than those high-priced IPP contracts that Napocor entered into during the time of President Fidel V. Ramos.
Meanwhile, Sen. Miriam Defensor-Santiago, chairman of the Senate committee on energy, over the weekend, admitted the panel is not being keen on pursuing the bill seeking to amend the Oil Deregulation Law.
Santiago, during her committee’s hearing last Thursday, said Congress should proceed with caution in repealing or amending the Oil Deregulation Law upon findings by the DoE’s independent review committee (IRC) that studied the effects of the existing law.
Based on the IRC’s report, the lawmaker said the recent spate of increases in domestic oil prices is largely due to international events outside the country’s control, not to the deregulation of the oil industry.
“The rapid economic growth in China and India has greatly increased the global demand for oil, resulting in tight global oil markets and current high prices,” Santiago said.
She added recent natural disasters, the violence in Iraq and the political unrest in major oil exporting countries such as the Middle East, Nigeria and Venezuela have intensified concerns about potential supply shortages, contributing to increasing prices.
Santiago stressed the steady depreciation of the peso since 1998 by 200 percent against the dollar was also to blame as it made it increasingly more expensive for the Philippines to purchase oil products at dollar prices in the world market.
“These factors would be applicable even under a regulated regime,” she noted.
“It is thus clear that the Oil Deregulation Law is not the root of all our problems...Going back to a regulated regime of oil prices may not be the answer,” the lawmaker said.
posted by philpower @ 9:15 AM,
