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BY Likha C. Cuevas-Miel, Reporter
The Government Service Insurance
System (GSIS) criticized the Makati Business Club for making
statements that are allegedly “the height of irresponsibility”
and “immaturity” after the business group condemned the state
pension fund and the Arroyo administration over its moves towards
Manila Electric Co. (Meralco).
Winston Garcia, GSIS president
and general manager, is challenging the influential business group
to invite him over since he is “willing to speak before them”
about how the Lopezes are allegedly mismanaging the utility firm and
committing other supposed violations of the Electric Power Industry
Reform Act and its own franchise.
“The problem with the officials
of this Makati Business Club is that they have been so consumed with
hatred with this administration that they have lost their sense of
impartiality,” Garcia said during the Anvil Business Club forum
Friday night.
Some of the points that Garcia
wanted to emphasize to the business club include some alleged
“abusive practices” by the Lopezes, and keeping a bloated
structure that costs P5.1 billion a year to maintain. Another P2.9
billion yearly is spent on 4,000 contractual workers plus P8 billion
in salaries and benefits for both permanent and contractual
employees.
He also lambasted the
“self-dealing” transactions Meralco’s management has with
other Lopez-owned and -controlled companies, some of which cost the
utility firm P17 billion in leases of power plants that are passed
on to consumers last year. About P4.89 billion in unused gas it
purchased from a Lopez company, First Gas, were also passed on to
consumers in 2007, Garcia said.
Recommendations to cut down
electricity cost
The GSIS chief proposed to scrap
the “highly onerous” IPP (independent power producer) provisions
like the “take or pay”—wherein Meralco pays for the cost of
running the generation plant and not the actual cost of the
electricity being transmitted. He also wants to eliminate the
capacity, transmission line and fixed operating fees of the IPP
contracts. By taking these all away, about P21 billion will be saved
annually based on 2007 figures.
In addition, Garcia said Meralco
should increase its purchased of electricity from the National Power
Corp. from 35 percent to 70 percent, which he said will be cheaper
compared with the current setup where most of its power needs are
supplied by Lopez-owned IPPs.
Garcia said Meralco must also
declare at least 50 percent of its accumulated surplus of P13.8
billion as dividends to the shareholders.
Business community upset
Alberto Lim, Makati Business Club
executive director, told The Manila Times that “everybody is upset
with what is going on” between the government and Meralco.
He said Garcia’s actions
against the company is bewildering and these do not add up as a
rational behavior of a disgruntled or hostile shareholder.
He said what GSIS is doing to
Meralco is politically motivated, or being backed up by the higher
power. He added a government takeover of the public utility runs
against the government’s principle of privatizing state-owned
firms.
“It could be precedent to
others . . . businesses will lose confidence. It will be a trend,
this government intervention, which may become popular, and this is
very disturbing to business,” Lim said in a telephone interview.
As the group also put it, the
Energy Regulatory Board contributed to the “diminution of its own
credibility in the eyes of the business community,” for allegedly
letting itself be used by the administration in trying to wrest
control of Meralco from private hands.
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