House quiz on Masinloc deal continues
Monday, August 07, 2006
By BEN R. ROSARIO
Notwithstanding a congressional directive directing the cancellation of the privatization bid of the 600-megawatt Masinloc coal-fired power plant in Zambales, the House of Representatives will still pursue a probe and dig into the circumstances that triggered the bungled deal.
Lanao del Norte Rep. Alipio Badelles, chairman of the House Committee on Energy, said the congressional inquiry that started last week will look closer into the fiasco in order that the energy panel can formulate legislative measures that would prevent such incident from being repeated in the future.
Badelles said the "postmortem" inquiry will zero in on what led to the failure of the Masinloc privatization program that was handled by the Power Sector Assets and Liabilities Management Corp. (PSALM).
He said the cooperation of officials of the PSALM, the Department of Energy, and the Department of Finance is expected by Congress as his committee resumes its probe on the issue this week.
"The committee will continue with its investigation. We have to dig deeper into the whole issue and conduct a post-mortem analysis of what went wrong and who’s to blame for the bungling of what was touted as the showcase of the asset privatization program of the government. We should never allow another YNN fiasco," Badelles said.
Earlier, the Joint Congressional Power Commission co-chaired by Badelles with Sen. Miriam Defensor Santiago ordered PSALM to totally abandon the sale of Masinloc to YNN-Ranhill after YNN failed to produce the $ 227 million up front payment required by government.
The JCPC likewise ordered the confiscation of the $ 14-million performance bond posted by the supposed buyer of the Masinloc power facility.
He said that initially, the committee found serious lapses on the part of PSALM in handling the Masinloc sale. For one, he noted that PSALM failed to conduct the necessary due diligence on YNN Pacific’s technical and financial capability to own and operate the plant, hence, the botched deal.
The panel convened last week to resume its investigation on the power deal. At a public hearing, PSALM president Nieves Osorio told the panel that the agency had issued the notice of termination of contract to YNN, and that the termination takes effect Sunday.
When asked by congressmen if PSALM could still accept payment of the $ 227-million up-front fee from YNN, Osorio could not give a categorical answer, saying that it is a matter that the PSALM board will have to decide. She admitted though that PSALM may have the option to accept whatever payment is forthcoming.
Formerly known as YNN Pacific, the consortium of Filipino and Australian investors won the bidding in 2004 for the Masinloc plant, with its $ 562-million bid price.
Under the purchase agreement, the YNN was supposed to pay the amount equivalent to 40 percent of the bid price on Dec. 5, 2005, but defaulted. It sought nother deadline, which was extended to Mar. 30, 2006.
The firm again failed to pay up, but instead of terminating the contract, PSALM extended the deadline until June 30, 2006 and forfeited the $ 14million performance bond that it posted.
The deadline expired and not a single centavo was paid by YNN. The deadline was extended for the third time until end July.
posted by philpower @ 11:29 AM,
