Mirant told: Get gov’t consent on sale
Monday, September 25, 2006
By MYRNA M. VELASCO
Energy Secretary Raphael P.M. Lotilla strongly laid down policy statement that US firm Mirant Corporation will need to secure government on the sale of equity shares covering its Philippine assets prior to concluding transaction documents with its chosen buyer.
"We will hold our ground with regard to Mirant. It (consent) is prior to any transfer, when you say prior, it has to be prior to any transaction. It has always been the case that before you can transfer any of the responsibilities or commitment, there has to be consent on the part of the Philippine government thru NPC (National Power Corporation)," Lotilla told energy reporters in a briefing.
Mirant started getting at odds with the Philippine government when one of its top officials chided NPC president Cyril C. del Callar that a government consent is not needed for them to finalize their divestment plans because the transaction is done at their regional unit in Hongkong.
What came next were series of Congressional investigations purposively to draw the line if government consent is in fact needed in the sale transaction.
But Lotilla made clear that "we don’t want to be inflexible about the process," noting that notwithstanding any circumstances, what thrives important is "there should be prior consent" because this is the only way to protect the government’s interest in the transaction being a counter-party in the energy conversion agreements inked by Mirant’s original owner Hopewell with state-run NPC.
Aside from the contentious issue on securing consent, the energy chief has also called on troubled Mirant Philippines to judiciously handle the concern on severance pay being raised by its employees.
The energy chief and Del Callar both intimated that a company engaged in the electricity business cannot just turn a deaf ear on the plea of its employees, because their demoralization might cause inefficient run of the power facilities which might trigger collateral damage on the economy and the consumers who don’t deserve to suffer from erratic power supply.
Lotilla refers to the employees as the "soft assets" in the power plant business, and it appears a concern of the government that their interest gets protected before any ownership change of the Mirant facilities would take place.
"The personnel are the ones who know the plant very well and so it is in the interest, not only of the private buyer but also of the national government to whom Mirant has a contract, that we are able to preserve the strength of the human resources available to these plants," the energy chief stressed.
Regardless of any divestment scheme being adopted, whether equity shares or outright sale of the assets, the energy secretary noted that it remains paramount that the concerns of the affected employees shall be prudently considered, if not legally at least on moral grounds.
This is the same principle, he added, that was settled with caution when government pushed for the measure that would privatize NPC.
In a letter, Mirant employees officially sought the help of the NPC president in their bid for separation packages set within corporate standards, which is 2.5 months worth of pay for every year of service.
While there was earlier pronouncement made by Mirant Philippines Jose Leviste assuring them that their rights are protected, they stated in the letter that "sadly, this holds no water should the new owners take over," adding that such statement, "is at best misleading and serves the purpose of sending the wrong impression, but leaves us holding an empty bag."
They stressed that there is no written company policy that guarantees the propounded severance plan.
"While it had been practiced in the past, these are non-binding on the new owners of the company. Once the new owners of Mirant take over, whoever they may be, it will be easy for them to severe employees and put in place new policies, including watered down severance pay packages. That, admittedly will be their prerogative as new owners," the Mirant employees added.
posted by philpower @ 8:18 AM,
