Angat Power Plant sale to Korean firm valid, says SC
MANILA, Philippines—The Supreme Court declared as valid the government sale of the 246 megawatt Angat Hydro-Electric Power Plant (AHEPP) in Bulacan to Korea Water Resources Corporation (K-Water).
In a decision dated Oct. 9 but released to the public Wednesday, the high court said the sale does not violate the 40 percent foreign ownership cap under the Constitution.
The high court, through Associate Justice Martin Villarama said “the construction, rehabilitation and development of hydropower plants are among those infrastructure projects which even wholly owned foreign corporations are allowed to undertake the Amended Build-Operate-Transfer Law.”
The high court said, the openness to foreign investments has been a policy since 1987 as evident in the fiscal incentives provided for the restructuring and privatization of the power industry in the Philippines, under the Power Sector Restructuring Program (PSRP) of the Asian Development Bank.
However, the high court said the stipulation on the sale where the National Power Corporation (NPC) agrees to the transfer of water rights to K-Water violates the constitution and the Water Code.
“We hold that the NPC shall continue to be the holder of the water permit even as the operational control and day-to-day management of the AHEPP is turned over to K-Water under the terms and conditions of the agreement whereby NPC grants authority to K-Water to utilize the waters diverted or collected in the Angat Dam for hydropower generation,” the high court said as it pointed that NPC’s water rights remain an integral aspect of its jurisdiction and control over dams and reservoirs.
K-Water is a water firm wholly-owned and controlled by the South Korean government.
Under Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA), PSALM is mandated to privatize all the assets of the National Power Corporation, including the AHEPP.
Having been declared by Psalm as pre-qualified to proceed further in the bidding process, K-Water went on to submit the highest bid for the project in the amount of US$440.8 million, thus, Psalm declared it as the winning bidder.
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