Grid knows no bounds | Inquirer Business

Grid knows no bounds

/ 07:14 AM September 18, 2017

Methinks it was just a case of relapse—nothing really serious.

According to reports, the government firm Transco, the National Transmission Corp., wants to go back to building and managing power lines.


Transco, of course, came into being in 2001.

The law that created it, called Epira, commanded the government to get out of the power industry.


Thus Epira forced the government to privatize the bankrupt state power firm Napocor.

The government even had to absorb the debts of Napocor of about P700 billion.

That was almost equal to the entire 2001 budget of the republic of P725 billion!

And Transco used to be one major problematic part of Napocor!

Enter the administration of the motorbiking Duterte Harley, and the same Transco, perhaps getting inspiration from above, wanted to snatch the P52-billion transmission project of the private National Grid Corporation of the Philippines (NGCP).

Last July, the Energy Regulatory Commission (ERC) approved the NGCP project called VMIP, the Visayas Mindanao Interconnection Project, finally linking the Mindanao grid with the rest of the country.

VMIP has been a dream project in this country for more than 30 years, having been conceived back in 1984.


During the time of Kuya Eddie, or Fidel V. Ramos, the government finally managed to get a loan from the Asian Development Bank to pursue it, only to scrap it later as “not economically viable.”

In 2004, Transco even affirmed the finding.

In 2012, NGCP revisited the project and, just early this year, submitted its proposal to ERC.

Under the NGCP plan, it will install an underwater cable from Zamboanga to Cebu, thus allowing it to move surplus power from Pangasinan all the way to Marawi City.

For that matter, the Visayas, which has long relied on expensive power barges, will also have the means to enjoy any surplus power from Mindanao.

But Transco president Melvin Matibag had a different idea. He reportedly warned the public that they would have to bear increases in power rates, if Transco would not do the project. Hmmm.

Based on the electricity gospel according to Matibag, the private NGCP, as a business, would have to recover its investments, amounting in fact to some P52 billion.

Since greed knows no bounds, in a way the company would have to recover the cost from the public through higher rates—plus more.

Based on the brilliant discourse, if Transco would instead do it, the P52-billion cost would disappear like magic, was that it?

A lawyer by profession, Matibag has been one of the long time hangers-on of Energy Secretary Alfonso Cusi ever since the cute administration of Gloriaetta, having been named general manager of the airport terminal Naia-3, when Cusi was head of the airport supervising body MIAA.

Anyway, under the brilliant plan, Transco will not have to borrow a single centavo for the project, because it will simply use the Malampaya funds, thus avoiding any “pass-on” charges to consumers.

In other words, the government will only have to use its own money, and—presto—the P52-billion cost will disappear.

Yes, ladies and gentlemen, it is as if the government will have no other urgent thousands of uses for the Malampaya funds.

It does not matter that, during the entire term of Duterte Harley, the government will be bound to stay on deficit spending, and it will still have to borrow tons of money.

Basta, just use government funds!

While many will praise Transco to high heavens for caring for the public, even guaranteeing no rate increase, the excellent plan looks suspicious.

In effect, any private company could not do the project, because, its greed knowing no bounds, it would only rob us.

On the other hand, Transco, being a government firm, will not rob us at all, was that it? No added cost due to delays? No incompetence? No overpricing? No kickbacks?

In 2001, Congress passed the reform law Epira precisely to take the government out of the transmission line business.

And now the relapsing Transco wants to defy it.

There could have been millions of reasons why Napocor went kaput, leaving us P700 billion of its debts, but the main thing was that, well, it was simply because the government ran it.

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TAGS: Breaktime, National Transmission Corp., Transco
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