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SMC eyes plunder raps vs PSALM chief

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SMC eyes plunder raps vs PSALM chief

Cites Sual power plant deal with Team Energy
/ 01:06 AM September 22, 2015
San Miguel president Ramon S. Ang. INQUIRER FILE PHOTO / LEO M. SABANGAN II

San Miguel president Ramon S. Ang. INQUIRER FILE PHOTO / LEO M. SABANGAN II

A legal squabble between conglomerate San Miguel Corp. and Power Sector Assets and Liabilities Management Corp. (PSALM) has worsened after the state firm’s new chief faces allegations of plunder over a 200-megawatt Sual power plant deal.

SMC president Ramon S. Ang told reporters yesterday that SMC had sent a number of letters to PSALM since a year ago questioning the 200-MW Sual power plant deal with Team Energy.

As this was done without a contract, Ang said the deal had “caused so much damage to the Philippine government.”

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“We told them what they did was illegal,” Ang said, noting that within this week, SMC was set to file with the Department of Justice a plunder complaint against PSALM.

Under Republic Act 7080, any public officer who, by himself or in connivance with members of his family, relatives by affinity or consanguinity, business associates, subordinates or other persons, amasses, accumulates or acquires ill-gotten wealth through a combination or series of overt or criminal acts in the total amount or total value of at least P50 million shall be guilty of the crime of plunder.

Although Lourdes Alzona was not yet the chief of PSALM at the time that the questioned transaction occurred, Ang said she was the chief finance officer (CFO), thus noting that she—along with the management team—would have to be held accountable.

Finance Secretary Cesar Purisima, who also chairs PSALM, would be excluded from the lawsuit. Ang said he believed that the finance chief wasn’t aware of the transaction and that it’s the management who should be held responsible.

Ang said SMC had sent its first demand letter to PSALM about a year ago but said it was timely to file the case now.

SMC’s relation with PSALM had turned sour recently when Alzona—who was appointed chief of PSALM only last month—cancelled SMC’s Ilijan power plant deal. Ang said PSALM’s claim of P6 billion shortfall in dividend payment to the government agency was “erroneous.”

Ang explained that since SMC won the Ilijan independent power producer administration contract in 2010, about P180 billion in payments had already been turned over to PSALM.

Apart from the P36 billion paid for the power plant itself, Ang noted that SMC had so far paid P144 billion in energy fee.

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When SMC bagged the Ilijan plant in 2010, Ang said this had come with a transition contract with Manila Electric Co. on baseload which the conglomerate only honored with proper notice to PSALM itself as well as the Energy Regulatory Commission. As such, he said the baseload deal with Meralco should have been a non-issue.

However, SMC deemed it unfair that PSALM would belatedly demand for additional payments only because there was a spike in spot electricity prices at the Wholesale Electricity Spot Market (WESM) in 2011. Had the energy output been sold through the WESM instead of Meralco, PSALM said it should have gained more from the Ilijan plant.

“Do you honestly believe that you can trade 1,200 MW at WESM everyday?” Ang said.

Ang lamented that it was on the basis of “speculative” and “erroneous” contention that PSALM had cancelled the contract with SMC.

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TAGS: Business, corporate squabble, Plunder, PSALM, San Miguel Corp.
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