Long and winding goad

So far, our motorbiking leader Duterte Harley does not involve himself in economic matters, leaving it all up to his handpicked management guys.

That, at least, is the sentiment in the business sector. Duterte Harley simply trusts his people. Period.

Still, it is well known in the business sector that, one way or another, his people could also be goaded in their decisions by previous business connections.

That may spell trouble for Duterte Harley.

For five long and winding years now, the government has been trying—and has been failing—to sell the 153-MW Naga Power Plant Complex in Cebu.

The seller was PSALM, or Power Sector Assets and Liabilities Management, and early this year, the rather antiquated Naga Power hit the headlines when the Supreme Court overturned the PSALM decision on the plant.

More than two long years ago in 2014, PSALM awarded the sale of Naga Power to the publicly listed company SPC Power Corp., formerly known as Salcon.

That SPC got the award seemed strange indeed. SPC did not win in the public bidding for the plant. In fact, it did not even take part in it.

The highest bid of about P1.09 billion came from Therma Power Visayas, or TPVI, which happened to be under the Aboitiz group.

Clearly, TPVI should be the winner, right?

According to PSALM, the final step in the bidding would be the so-called “right to top” that belonged to SPC.

That issue became so big that media even gave it a tag, “the RTT,” and it was the very same issue that the Supreme Court had to tackle in its recent ruling.

It started a long time ago in the 1990s, during the period of 10-hour long blackouts, when SPC got from the Ramos administration the contract to rehabilitate and operate Naga Power.

Still known as Salcon at that time, SPC had an agreement with the government that, if and when the government would decide to sell the plant, SPC would have the right to match the highest bidder to get the plant.  In other words, SPC did not have to join the bidding.

The SPC contract ended in 2009, and PSALM decided to sell the plant.

The very same RTT issue, the very same sore point in the recent decision handed down by the Supreme Court, held back the bidding even way back then.

It became the target of former Sen. Sergio Osmeña III, who prevailed upon the PSALM way back in 2011 to delay the bidding.

Osmeña wanted to conduct an investigation on why SPC got from the government the snug arrangement RTT, in the first place.

It seemed the RTT was a feature in the SPC contract, known as ROMM during the power crisis of the 1990s, standing for “rehabilitate, operate, maintain and manage,” for which SPC would have to put up all the capital—i.e. no government funds.

The government at that time resorted to ROMM because of the sorry state of power plants under the defunct Napocor.

Now, Osmeña asked the Supreme Court to nullify the RTT, which it did.

In effect, the Supreme Court also declared that the Aboitiz firm TPVI to be the winner in the bidding held two years ago.

The Supreme Court noted that the RTT would only serve to discourage other groups from taking part in the bidding.

Perhaps they would just have to bid really high—as in “crazy” high that SPC would be foolish to top it.

In contesting the ruling, SPC argued that TPVI took part in the bidding, fully aware of the existence of the RTT, which was specified in the bidding rules.

The Supreme Court in effect changed the bidding terms after the fact, after all has been said and done in the bidding.

Besides, SPC actually offered to buy the plant for P1.14 billion, or 5 percent higher than the TPVI bid, about P54 million more.

SPC thus argued that, because of the Supreme Court ruling, the government would stand to lose P54 million.

Question: What would be the position of the Duterte administration in the issue?