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Bayan Muna says power supply bidding rigged in favor of Meralco plant

/ 06:20 PM October 31, 2019

MANILA, Philippines—The chair of the militant group Bayan Muna took to task the Manila Electric Co. (Meralco) on Thursday, Oct. 31, for refusing to revise its bidding terms which were allegedly designed to favor one of its own power plants, Atimonan 1.

In a statement, Bayan Muna Chair Neri Colmenares said while consumers emerged victorious in a Supreme Court ruling requiring all Meralco power supply contracts to undergo public bidding for lower rates, this victory was being undermined by the refusal of Meralco to adopt an independent and fair bidding procedure.

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Colmenares and Bayan Muna Rep. Carlos Isagani Zarate had recently filed another petition at the high court to require Meralco to tap an independent bidding supervisor, not itself, for power supply agreements or PSAs.

Preventing Meralco from selecting its own supplier, Colmenares said in a statement, would “ensure that no expensive sweetheart deals” are made.

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“Despite the Supreme Court victory, however, Meralco was allowed to control the bidding procedure and even appoint all the members of the supposedly independent Bids and Award Committee,” Colmenares said.

“ If no independent bidding will take place, then it is as if no bidding took place, and we can again suffer from Meralco’s selection of its chosen yet expensive supplier,” he said.

One example cited by Colmenares of how Meralco allegedly rigs the results of power supply biddings was the contract being pushed to the power plant Atimonan 1 in Quezon province.

Meralco, according to Colmenares, inserted “many absurd requirements in bidding terms” which required the winning power plant bidder to not be in commercial operations earlier than March 2024.

This appeared to be a maneuver to make Atimonan 1 qualify for the bidding. The Meralco-owned power plant would be in commercial operations by March 2024.

According to Colmenares, this insertion disqualified other power plants that are “ready and capable of providing electricity earlier than 2024.”

“This is highly suspicious,” Colmenares said. “In the end, only Atimonan 1 qualified in the bidding,” he added.

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“Bidding terms that are favorable to one bidder and disadvantageous to others practically negates the bidding and does not assure cheaper rates for the people,” the Bayan Muna leader said.

The Department of Energy, said Colmenares, should stop the bidding and the Energy Regulatory Commission should deny approval.

An independent bidding process, he said, would assure consumers of “the cheapest supply of electricity.”

Colmenares said the problem was partly attributable to the DOE which amended its rules to relegate itself to the role of a mere observer in the bidding process with Meralco controlling the entire procedure.

In 2015, Colmenares said DOE rules required an independent third party auctioneer to supervise the bidding of PSAs.

“For strangely unknown reasons, the DOE amended its own rules,” he said.

“Why the DOE, which had the power to actively participate in Meralco’s bidding process, will purposely defang itself is still a mystery,” Colmenares said.

“Now, Meralco can dictate the terms of the bidding and impose onerous terms that will discourage other bidders to the advantage of Meralco affiliates,” he said./TSB

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TAGS: bidding, DoE, electricity, Meralco, power plant, power supply, terms
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