DOF on the warpath

"Secretary Dominguez has instructed PSALM to relentlessly pursue collection efforts against these IPPAs and use all remedies available to protect the public interest."

The country’s top economic manager, Finance Secretary Carlos “Sonny” Dominguez III, has expressed dismay that independent power producers administrators (IPPAs) owe the state-owned Power Sector Assets and Liabilities Management Corp. (PSALM) close to P60 billion in unpaid obligations.

PSALM is the government corporation that manages the sale and privatization of the country’s power generation and transmission assets.

As chairman of its Board of Directors, Dominguez laments that PSALM has been forced to borrow more than P20 billion and pay almost P3 billion for interest and other financial charges just so it could service maturing obligations in 2018. The state-owned firm is also borrowing $1 billion to service similar maturing obligations at the end of May 2019.

Dominguez does not hide his displeasure over the failure of South Premiere Power Corp. (SPPC), which administers the Ilijan gas-fired power plant in Batangas City, to settle its highest unpaid obligation due to PSALM amounting to P19.775 billion.

SPPC accounts for 70 percent of the P28.46 billion owed PSALM by IPPAs, or a third of PSALM’s collectibles from IPPAs, electric coops and other private corporate entities to PSALM totaling P59.23 billion.

PSALM, created by law to manage the sale and privatization of the country’s power generation and transmission assets, had issued in 2015 termination orders for SPPC’s appointment as IPPA for the Ilijan gas-fired power plant in Batangas City. But the power firm managed to secure an injunction from the Mandaluyong City Regional Trial Court so it continues, to this day, as administrator of the Ilijan power generation plant.

PSALM president-CEO Irene Joy Garcia reported to Dominguez that because of the huge obligations owed PSALM by the SPPC and the other IPPAs and electric coops, “the Government through PSALM is constrained to resort to borrowings that the National Government guarantees, in order for PSALM to fulfill its mandate of liquidating the financial obligations of the National Power Corporation on time.”  

“In fact, in 2018, PSALM borrowed about P23 billion to cover its maturing obligations, and PSALM is set to borrow USD 1.1 billion for obligations maturing this end of May 2019,” she emphasized.

As a result, PSALM had to pay interest, guarantee fees and other finance charges of about P2.62 billion per year.  Had the IPPAs and electric cooperatives paid their obligations, PSALM would not incur the additional costs, she pointed out.

Apparently unable to hide his dismay over the fact that IPPAs and electric coops had yet to settle their outstanding obligations with PSALM, Dominguez said these “could have otherwise been utilized by the Government for the construction of public school classrooms or to build roads and bridges.”    

The SPPC has strongly denied PSALM’s claim and insisted PSALM miscalculated the obligations it owed the state-owned power asset management firm. 

Dominguez has instructed PSALM to relentlessly pursue collection efforts against these IPPAs and use all remedies available to protect the public interest.

Preserving our heritage

We’re glad that it’s not just the National Commission for Culture and the Arts (NCCA) that’s involved in preserving our unique cultural heritage.

We welcome the move of the Philippine National Railways (PNR) to retain what’s left of 10 old train stations in Bulacan province built in the late 19th century and preserve them in the process of building the 17 stations of the P777-million Manila-Clark Railway System or North-South Commuter Railway. The future railway will use the old PNR right of way and will connect Central Luzon and Metro Manila.

The structures in the towns of Balagtas, Guiguinto, Malolos and Calumpit, among others, would be renovated to complement the design of the new railway stations. According to news report, the ruins are being guarded 24 hours daily to prevent informal settlers from destroying them.

The PNR should really be commended for its efforts to preserve part of our heritage. But local governments should do their part as well.

Farther north, in San Fernando, Pampanga, the defunct railway station of the Northrail line has been preserved by the city government and transformed into a museum.

The old train station is steeped in history. It was inaugurated by Governor-General Eulogio Despujiol and Bernardino Nozaleda, the Archbishop of Manila, on Feb. 23, 1892. In April 1942, during the Bataan Death March, it served as the end-point for the 102-kilometer march from Bataan from which Filipino and American prisoners-of-war were carted to Capas in Tarlac en route to their final destination, Camp O’Donnell.

On June 27, 1892, Jose Rizal disembarked from this station to meet some recruits of La Liga Filipina and again the next day en route to Bacolor. A marker in the station which we were fortunate to visit in August last year showed that it was at this station that Rizal also met his Kapampangan girlfriend, Rosario Joven, whenever he went to the province. Visitors can take selfies with a life-size statue of a seated Rizal seemingly waiting for someone in the train station. Could it be Rosario? We’ll probably never know.

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Topics: Power Sector Assets and Liabilities Management Corp , South Premiere Power Corp , Carlos Dominguez
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