P122.4M loss in PNOC-EC coal deal unearthed—audit report
By Jerry E. EsplanadaPhilippine Daily Inquirer
MANILA, Philippines—The state-run Philippine National Oil Co.-Exploration Corp. (PNOC-EC) registered losses of more than P122.4 million in an allegedly anomalous importation of almost 70,000 metric tons of Indonesian coal in 2009, according to an internal audit conducted by the energy firm.
The company allegedly entered into the questionable coal deal despite the absence of a supply contract and demand from the state generator, the National Power Corp. (NPC), the audit report, a copy of which was obtained by the Philippine Daily Inquirer, showed.
The audit report’s findings confirmed the allegations made by current PNOC-EC chairman Gemiliano Lopez Jr. and ex-PNOC-EC chairman and director Crismel Verano on irregular coal deals during the previous Arroyo administration.
The report, dated April 29, 2010, said that after the NPC-run Sual coal-fired power plant refused to accept the Indonesian coal that arrived on board the Austin in September 2009, the PNOC-EC incurred additional costs for the diversion, transfer and unloading of the shipment to the Asian Terminals warehouse in Batangas for stockpiling.
These expenses included those for demurrage, amounting to P68.3 million; stevedoring, P37.2 million; vessel charter, P8.67 million; arrastre, P4.96 million; wharfage fees and port charges, P2.41 million; survey expenses, P521,766.25; business fees, P246,286.51; and terminal costs, 33,444.62.
The NPC refused to accept the shipment because its coal inventory level was high at the time and because there was no signed coal supply contract yet between the NPC and the PNOC-EC.
In another report, the PNOC-EC internal audit department revealed that “some coal customers paid their accounts beyond their credit terms.”
It said at least six firms owed PNOC-EC a total of P1.42 million in interest on past due accounts in 2008 and 2009. The companies include the NPC, Republic Cement Corp., Rock Energy International Corp., Holcim Phil., United Pulp and Paper Co., and Taiheiyo Cement Phil.
It said PNOC-EC losses in coal transactions with Republic Cement Corp. in 2009 amounted to P8.05 million and P12.5 million “based on acquisitions at base and net purchase prices, respectively.”
“These transactions were part of the committed volume to RCC in 2008, as stated in the coal supply agreement, but were delivered only in 2009,” it said.
Early this month, Lopez assailed some PNOC-EC top executives for allegedly covering up the irregularities in the firm.
In a September 4 letter to President Aquino, Lopez also reported that an undisclosed number of documents relating to these allegedly anomalous deals were missing.
“When I assumed my post (in late 2010) and upon learning that these transactions were highly anomalous, I immediately asked different groups in and out of the PNOC-EC to conduct investigations. However, they were all hampered by the lack of available documents,” he said.
During his first day in office, he said he found that “the filing cabinet of the PNOC-EC president only had biscuits and candies inside and not a single file on record.”
Lopez also chided the firm’s management for placing a half-page advertisement in the Philippine Daily Inquirer and another broadsheet in which it “cleared and acquitted the respondents in (graft cases involving PNOC-EC executives filed with the Ombudsman) without a proper hearing, and without waiting for the decision of the Ombudsman, which already acquired jurisdiction over the cases.
Verano, meanwhile, claimed that aside from the P122.4 million in losses in the Indonesian coal deal, PNOC-EC also incurred losses of more than P20 million in “ghost coal deliveries.”
On July 31, Verano filed plunder charges against current PNOC president Antonio Cailao and his brother-in-law, former PNOC-EC president Rafael del Pilar and five other top officials of the company. Del Pilar currently sits as a director on the PNOC-EC board.
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Tags: Audit , Business , Coal , Crismel Verano , Gemiliano Lopez Jr. , government-owned and -controlled corporations , oil and gas , Philippine National Oil Co.-Exploration Corp. , state-owned corporations
