State-run National Transmission Corp. asked the Philippine Economic Zone Authority to reconsider its proposal to operate, maintain and manage Baguio Economic Zone’s power distribution system for 25 years.
Peza earlier said the joint counterproposal of Transco with Benguet Electric Cooperative challenging the offer of Manila Electric Co. for the 25-year lease concession agreement “failed to pass the evaluation.”
Peza also cited the financial reports of Beneco, TransCo’s outstanding distribution rates and the proposed distribution rates for the decision.
TransCo president Melvin Matibag, in a letter to Peza, noted “the lack of transparent process, guidelines, terms of reference, very short transaction schedule and evaluation criteria.” He said these could not be the reason of Peza for rejecting their proposal.
“We also find Peza’s procedures quite inconsistent with government’s thrust for complete transparency, competitiveness, simplicity and accountability. Thus, a third-party observer might entertain a reasonable conclusion that the transaction might be giving unwarranted benefits, advantage or preference to a private entity,” Matibag said.
He said while Beneco’s income statement showed negative net income, it did not mean real financial loss. Matibag said this was because the financial report of the electric cooperative did not reflect the total revenue collected from member-consumers while they were required to report non-cash depreciation expense.
Matibag said there was also a difference in the financial computation of electric cooperatives like Beneco and private distribution firms like Manila Electric Co.
He said Beneco had a financial rating of 30 percent, according to the National Electrification Administration which meant it “did not default on its obligations to power suppliers, transmission service provider, creditors, government, employees, etc.”
Matibag said Beneco also scored 30 percent in technical performance because of its single-digit system loss of 8 percent to 9 percent.
“The efficient operation of Beneco as one of the leading and usually benchmarked distribution utilities in the country is what motivated Beneco to participate in the Peza selection process,” he said.
Matibag said TransCo had fully settled its tax liabilities with the government amounting to P876 million while the remaining P856 million was subject to tax abatement with the Bureau of Internal Revenue.
“We request Peza not to take against TransCo this tax liability for purposes of evaluating its financial performance and capability under this transaction,” he said.
Matibag also called out Peza for saying that the TransCo-Beneco proposal was not compliant with Peza’s board approval to retain BCEZ’s existing rate.
He said the criterial on the declaration of non-compliance, if any, was irrational and failed to meet the required standard of government in all government transactions.
“We believe that for this transaction, the evaluation criteria for the selection of final proponent should be who can provide the lowest rate for the locators in BCEZ and not who can give the highest concession fee to Peza. Peza’s business is not to maximize revenue from concession agreements but to maintain the ecozone attractive to investors,” he said.