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Winston Garcia insists that he launched his campaign against the
controlling owners of Manila Electric Company in order to check what
he claims is the mismanagement of the country’s biggest
distributor of electricity. His motive: to safeguard the interest of
members of the Government Service Insurance System (GSIS), which he
heads.
The problem is that, as an offshoot of his
attacks on Meralco, which he first launched some two weeks ago,
share prices of the publicly listed company have tumbled. Stock
exchange figures show that from a month-high closing of P81 per
share on May 2, Meralco shares closed at P69.50 on May 16.
The Times reported last week that members of
GSIS, a major investor in Meralco, “will find themselves at the
losing end if the battle” between the administration of President
Arroyo and the Lopezes continues.
The drop in Meralco share prices, according to
bourse analysts, would ultimately result in a P1.2-billion loss in
the 10-percent stake in Meralco that GSIS acquired early this year.
Talk about shooting itself in the foot.
GSIS had used the proceeds from the sale of its
P14-billion shares in San Miguel in order to raise its investments
in Meralco. With a P9-billion infusion, it was able to raise its
stake in Meralco from 8 to 25 percent.
On the other hand, the Lopezes—through First
Philippine Holdings Corporation—own 33 percent of Meralco, just
enough to give them the corporate clout to run the utility.
In his anti-Lopez crusade, Garcia has raised a
strange battle cry: “A new Meralco management so we can reduce the
cost of electricity.” Strange because nowhere in the charter of
GSIS does it say that the pension fund should work to drive down
power rates. Not even the Department of Energy has been able to do
so.
Equally strange is Garcia’s reluctance to
explain in detail just what he means by a “change in management
and direction.” Would he have GSIS bureaucrats run Meralco,
despite the fact that the pension fund has neither the competence
nor the experience to operate a public utility?
Still and all, the controversy sparked by
Garcia’s complaints against the Lopezes has managed to draw public
attention to the overall energy situation in the country.
Time and again it has been said that power costs
in the Philippines are among the highest in Asia. Such costs, in
turn, have made the country a less attractive place to do
business—not to mention the heavy financial burden they have long
placed on the shoulders of millions of household consumers.
But are high power costs Meralco’s fault
alone?
At the Kapihan sa Sulo media forum Saturday
Meralco officials asked their customers to take a close look at the
components of their “unbundled” electric bill for the month of
April. For every peso electric consumers paid, just 12 centavos went
to Meralco, 12 centavos to National Transmission Corporation, eight
centavos for “system loss,” 10 centavos for taxes/universal
charges and 58 centavos for “generation.”
But since it is Meralco that does the billing
and collection of payments from power consumers, it is the one that
gets the brickbats for the high cost of electricity, which is
generated by plants of the state-owned National Power Corporation
and independent power producers.
In fact, Meralco officials pointed out that
since June 2003 there has been no change in their distribution,
supply and metering charges.
True, Meralco also sources power from coal and
natural-gas plants controlled by the Lopez group’s
power-generating arm First Gen. However, company officials said the
cost of power purchased from Quezon Power, First Gas- Sta. Rita and
First-Gas San Lorenzo was lower than that of power purchased from
Napocor.
There are many reasons why Napocor rates are
high. These include inefficiencies arising from its spot-market
purchase of fuel, such as coal, and its old, poorly maintained power
plants. And therein lies the root of the most serious energy problem
facing the country: a looming shortage.
If no new major power projects are undertaken
soon, the Philippines would likely experience by 2011 the same
crippling, 12-hour outages that brought the economy to a virtual
standstill in the early 1990s.
A minimum of five years are needed to see
through a power project from proposal through construction and
technical testing and finally to commissioning. If no such projects
are launched anytime soon, the country will again suffer protracted
brownouts and blackouts on a daily basis.
The government does not have enough resources of
its own to build the electric plants that can meet the country’s
burgeoning power needs. Only the private sector has the wherewithal
for such capital-intensive projects.
The problem is that the government’s
deplorable treatment of Meralco is sending the sort of signals,
which can only turn off prospective investors in the power sector.
From high power costs the country could soon end
up with no power at all.
opinion@manilatimes.net
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