Transco told to return P1.5B

The National Transmission Corp. has failed to utilize P1.5 billion in government subsidies for the repair and rehabilitation of transmission lines destroyed by Supertyphoon “Yolanda” in November 2013, according to the Commission on Audit.

In its review of Transco’s financial transactions in 2014, the COA said the state-run power distributor also failed to collect more than P803 million from its customers, mostly electric cooperatives.

The COA found that some of the P803 million receivables were taken over by the National Grid Corp. of the Philippines (NGCP), a private company which bought Transco’s power transmission business, which it failed to remit to Transco.

“The subsidy of P1.5 billion… for the rehabilitation and restoration of transmission lines damaged by Yolanda remained unobligated and undisbursed as of Dec. 31, 2014… thus defeating the purpose for which it was given,” the COA said in its audit report.

It said the national government released the rehabilitation funds to Transco on Dec. 27, 2013, or more than a month after the catastrophic typhoon flattened communities, toppled power lines and left large swathes of the Visayas without power for several months.

Regarded as the strongest weather disturbance ever to hit land in recent history, Yolanda left more than 6,000 people dead and displaced nearly 2 million residents.

The COA said the funds were transferred to Transco under Special Allotment Release Order No. F-13-01333 and Notice of Cash Allocation No. NCA-BMB-F-13-0024890 and were included in Transco’s corporate operating budget for 2014.

But the sum has remained intact and has in fact earned interest income, the state audit agency said. As of Dec. 31, 2014, the account balace for the subsidy had reached P1.503 billion, it said.

Upon verification, the state auditors found that it was NGCP which spent for the restoration and rehabilitation of the damaged power lines.

Return unspent money

“Transco did not incur expenses related to the rehabilitation and restoration, hence, to date, no obligations have been charged against the subject subsidy,” the COA said.

Since the public funds were left unused, the COA directed the Transco to return to the state treasury the unspent money including all the interest it has earned.

In response, Transco officials told the COA that they would ask the legal opinion of the Office of the Government Corporate Counsel if it could transfer the subsidy to the NGCP.

The COA said that if government lawyers fail to render an opinion on the issue by May 31, Transco should immediately turn over the funds to the Bureau of Treasury.

As for Transco’s P803-million uncollected income from its electric cooperative customers, the COA said the amount included “cost recoveries for services provided” by Transco before it awarded a concession contract to the NGCP.

Unpaid for five years

It said some of the receivables, most of which have remained unpaid for five years, were “assumed by NGCP without remitting the portions due to Transco despite repeated collection efforts against NGCP.”

The state auditors said 38 electric cooperatives, which supposedly owed P284 million in transmission fees to Transco, sent letters to the state-owned corporation informing it “that they did not have any outstanding accounts.”