THEIR lawyers may be able to win any case and get a ruling that the ownership of Meralco by companies controlled by Anthoni Salim of Indonesia does not violate Philippine laws and the Philippine Constitution. But something cannot be denied: It is a betrayal of the Philippines and the Filipinos for Meralco and its controlling owners to have spent a huge sum of money to build the two power plants in Singapore while we Filipinos are suffering from the present power supply situation.
As our columnist Rigoberto Tiglao’s article that we had for our headline last week said,
“Meralco officials keep whining that its high electricity bills are due to the fact that Luzon doesn’t have generators and that because of this, we will be suffering the heat because of brownouts this coming summer.
“Yet the first of Meralco’s two brand-new natural-gas-fired 400-megawatt generators (for a total capacity of 800 MW) started operations 6 February in Jurong Industrial Estate in Singapore, which has the most tightly regulated electricity industry in Asia.
“The Jurong complex’s combined 800-MW capacity would increase the roughly 10,000-MW capacity of Singapore’s power plants by 8 percent.
“If it had been built in the Philippines, Luzon’s 8,000-MW capacity would increase by 10 percent, and would have significantly decreased both the incidence of brownouts and Meralco’s electricity rates as it won’t need to rely on expensive power of peaking plans.
“What does a ‘800-MW plant’ mean? According to the Department of Energy ‘2013 Supply-Demand Outlook,’ the power plants currently being built in Luzon for completion by 2015 will have a capacity of 869 MW.
“The Jurong electricity complex, valued at $1.2 billion, was owned by the Indian-controlled GMR Energy, which started construction in 2010. In April last year, Meralco’s affiliate FMP Power Holdings bought GMR Energy for $579 million.
“FPM Power Holdings is 60 percent owned by First Pacific Co. (the “FP”), controlled by Indonesia’s third richest tycoon, Anthoni Salim, and 40 percent by Meralco’s wholly owned subsidiary Meralco PowerGen.
“Meralco itself is controlled by the Indonesian magnate, since as a First Pacific annual report puts it, Salim’s ‘intermediate holding companies, subsidiaries, and affiliates’ total 50 percent shares in the firm, making him the biggest and controlling stockholder since 2011. (The San Miguel group is a minority with 27 percent of the shares, while the oligarch clan of the Lopezes, which controlled Meralco for decades, before and after martial law, owns only 4 percent now.)
“GMR Energy was paid $530 million, while the First Pacific-Meralco joint venture spent another $49 million to complete the power project. As a result of the sale, GMR Energy made $242 million in its three- year investment.
“The First Pacific-Meralco firm would also assume the huge $545 million the Indian GMR Energy borrowed from a consortium of banks to finance the power complex’s over $1 billion cost….
“According to a recent Meralco investors’ quarterly briefing, the company will spend P9 billion ($215 million) for its stake in the Singapore power firm.
“Meralco’s exposure is the biggest single foreign investment by a domestic company in recent years, significant enough that the firm’s outward remittances explain the huge outflow of dollars towards the end of last year.
“It is not clear whether Meralco’s P9 billion exposure was sourced from borrowings or from its huge profits in its operations in the Philippines.
“What irony. When the announcement was made of his firm’s exit out of the Singapore power industry, the Indian conglomerate’s chairman G.M. Rao said: ‘The cash flows (from the sale) will help GMR Energy to focus on our domestic energy business and accelerate ongoing (power) projects with a 5,790 MW capacity.’
“In our case, Meralco is spending P9 billion to own a power plant in Singapore, when the Philippines is facing a power crisis because there are not enough investments to finance the building of electricity generation plants here.
“The Jurong plant could be very profitable for Meralco. But something must be terribly wrong here when our biggest utility firm, which controls 60 percent of the electricity market, chooses to invest billions of pesos outside the country, which has been capital-deficient.
“Could this be the biggest flaw of a system in which private investors—driven of course by capitalism’s prime directive of making money—own a firm which has a monopoly over the sale of an essential commodity, electricity?
“Or could this be just the flaw of having a foreigner—a citizen of Indonesia, which is essentially our competitor in the global market —controlling our biggest electricity company?…
“No one certainly can blame Mr. Salim if he steers Meralco—with its overflowing war chest filled by profits from Filipino consumers suffering atrocious electricity bills and by borrowings from the local capital market —to profitable ventures abroad while the Philippines goes under.”
Doomed to poverty
Indeed our poor country is doomed to go under and to forever have more than 60 % of its population suffer poverty and life in primitive conditions, if the present power situation continues.
No serious resurgence of manufacturing, no credible national industrialization and no meaningful success in agribusiness will ever happen in our country if electricity will continue being one of the costliest in the world.
And that means no jobs would ever be available for the 12.1 million unemployed Filipinos, and the millions more that will be entering the job market every year.
The people behind the Salim-Meralco decision in Jurong have no love for the Philippines and the Filipinos.
They hate us.