State auditors have ordered the National Transmission Corporation (TransCo) to return to the national treasury P1.5 billion that it received in 2013 for the rehabilitation and restoration of transmission lines damaged by Super Typhoon Yolanda (international name Haiyan).
In a 2014 audit report on TransCo, the Commission on Audit (COA) said the amount “remained unobligated and undisbursed as of December 31, 2014, one year after receipt, thus, defeating the purpose for which it was given.”
It stated that a national government subsidy of P1.5 billion was included in TransCo’s Corporate Operating Budget (COB) in 2014 for the rehabilitation and restoration of transmission lines in the Visayas.
TransCo was unable to obligate the amount as of December 31, 2013 because of the three-day validity period of the Special Allotment Release Order (Saro), auditors said.
It was only on December 27, 2013 that TransCo received the corresponding Saro F-13-01333 and the Notice of Cash Allocation (NCA) amounting to P1.5 billion.
However, the Saro was valid only until December 31, 2013 or three days after its release.
“To date, the said subsidy remained intact and has in fact earned an interest income. As of December 31, 2014, the subsidy account balance reached P1.503 billion,” auditors said.
The audit team found that it was the National Grid Corporation of the Philippines (NGCP) that restored the damaged transmission lines.
NGCP operates the country’s transmission system.
TransCo’s management has informed COA that they have sought an opinion from the Office of the Government Corporate Counsel (OGCC) on whether TransCo is authorized to disburse the subsidy in favor of NGCP, which is a private firm.
TransCo is a government-owned and controlled corporation (GOCC) created in 2001 by virtue of Section 8 of Republic Act 9136 or the Electric Power Industry Reform Act (Epira).
TransCo’s transmission business was privatized through a concession deal entered into with the NGCP in 2008, which granted the latter the right to take over and operate the whole of TransCo’s regulated transmission business. Ownership of all transmission assets and real property however, remains with TransCo.
As owner of the transmission assets, one of TransCo’s key responsibilities is to protect the national government’s interests by ensuring NGCP’s compliance with the terms and conditions of the Concession Agreement and the policies of the Department of Energy (DOE).