Subject: Screw Meralco
Your observation on Meralco made me think that all government-approved franchises/licenses to private sector to operate and manage public utilities should be revoked and revised by the next government based on the argument of contestable markets. Existing franchises should carry guarantee perpetual benefits without periodic review of operations.
I am pretty sure all legal contracts of the government with all private operators of public utilities come with fiscal sweeteners for them to undertake capital investments so much so that rates of return are guaranteed, and that operational expenses, tax exemptions, and foreign exchange risks are charged to the general public. Therefore they are expected to provide continuous service since private profits are already assured. There are no excuses for poor performance.
Now, should the private operators of public franchises balk at government and/or the general public suggestions to improve/remedy bad, inefficient service or suggest new investments (ie telecom lines shld be underground), the government should cancel their franchise/license and proceed to open the market for other interested private party/ies willing to accept the new conditions.
Secondly, private operators of public utilities must set aside a large portion of their guaranteed profits to re investment in the same public utilities. At no instance should they re invest proceeds to similar public utilities outside of the Philippine territory. Failure to do so, would result to automatic forefeiture of all physical and financial assets of the private operators of public utilities.
A competent government has in its powers to regulate all public utilities to make them deliver agreed services to the general public.
Mr. Carlos Baldago