A subsidiary of the Philippine National Oil Corp. admitted on Friday that its jatropha project is a failure.
The Alternative Fuels Corp. (AFC) said it has passed a board resolution “to wind down the jatropha project.”
In the 2011 report of AFC which was only released on July 2, the subsidiary stated it issued Board Resolution No. 1981, series of 2011 since there is a need to conserve the remaining funds of the company.
“The project being resource-and-capital intensive, no additional fund releases were provided to the partner growers,” the AFC told the Commission on Audit (COA), when state auditors noted that AFC wrote off P204.06 million from the jatropha plantation account.
Once touted as a promising energy-saving project of the government, the jatropha seemed to prove otherwise as can be gleaned from the reply of the AFC to state auditors.
“It is deemed expected that the jatropha plantations of the partner growers were no longer maintained; hence, the plants did not survive and no seeds were produced,” the report read.
Jatropha seeds were pushed as sources of biodiesel, even reported to be sustainable, as these do not reportedly compete with food and other agricultural produce.
COA said that total releases to the partner growers of the plant amounted to P414.48 million.
However, P240.06 million was written off after the board of directors issued the resolution that closed jatropha plantation operations in January 2011.
“The termination of operations was implemented without first making an assessment of the amount of recovery from the fund releases,” auditors said of AFC’s write-off of the multi-million peso cash transfer.
AFC officials clarified they did not write off the P240.06 million but only recognized an allowance for impairment.
They added that P414.486 million was “not the actual amount released for the jatropha plantation.”
Nevertheless, they told auditors that they will make the “necessary reclassification.”
The COA stood by its observation. “We maintained our observation that the company had written off the portion of P240.06 million from the jatropha plantation,” adding that P200.02 million was also written off from the Allowance for Impairment Losses account.