$14m Masinloc bond goes to 2006 budget
Monday, July 10, 2006
Finance Secretary Margarito Teves said proceeds of the $14 million performance bond forfeited by YNN Pacific Holdings and Malaysia’s Ranhill Power Bhd. will be used to bankroll key infrastructure projects and social services.
Teves told reporters that the forfeited bond could also form part of the supplemental budget to be submitted to Congress in case the 2006 General Appropriations Act was not enacted.
“It can go to the treasury, it can be part of the funds to use for any of the expenditures within the budget. Even assuming we don’t have a 2006 budget, the projects can be identified and this can be part of the supplemental budget,” he said.
The YNN Pacific and Ranhill group failed to meet the June 30 deadline for the upfront payment of $227.5 million for the 600-megawatt coal-fired power plant in Masinloc, Zambales, resulting to the forfeiture of its performance bond.
The government, meanwhile, assured that the performance bond would not be deducted from the $561 million sale price of the 600-megawatt Masinloc coal-fired power plant.
Energy Secretary Raphael Lotilla allayed concerns that the bond formed part of the price of the coal plant, leaving the government in a disadvantageous position.
“That would not be part of the $561 million,” Lotilla said.
He said the sale agreement did not prevent the government from “accepting” the $227.54 million upfront payment if the consortium came up with the payment within the 30-day termination period of the contract.
The consortium was earlier given a March 31 deadline to deliver the down payment but the government agreed to extend it on the condition that the performance bond was raised to $14 million from $11 million. Alena Mae S. Flores, Lawrence Agcaoili
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