BAYOMBONG, Nueva Vizcaya—A controversial executive order signed by then-President Benigno Aquino III in 2014 has denied sizable income to local government units and indigenous cultural communities hosting the Casecnan Multipurpose Irrigation and Power Project, records examined by Manila Standard showed.
Executive Order 173, signed by Aquino, allowed independent power producers like CMIPP to pay real property taxes levied by LGUs to government-owned and -controlled corporations, in this case the National Irrigation Administration, to attract investors.
Without the income from Casecnan, the Nueva Vizcaya provincial government’s income was reduced by eight percent, that of Alfonso Castañeda municipality by 61 percent, and the barangay LGUs of Pelaway by 84 percent, Abuyo by 77 percent, Cauayan by 86 percent and Lipuga also by 86 percent, records obtained by the Standard revealed.
Before EO 173 was signed on October 31, 2014 by Aquino, these LGUs were expecting to collect a combined P1.7 billion in real property taxes, a newspaper report on October 15, 2014 said, quoting officials of the Nueva Vizcaya provincial treasury.
“The Bugkalots of Casecnan lamented the fact that EO 173 has caused a delay in the collection of taxes that should have been used to alleviate poverty in their villages,” Gov. Carlos M. Padilla told Manila Standard.
The Casecnan project’s impact zone is an ancestral domain of the Bugkalot ICCs. An irrigation project of the Ramos administration, the CMIPP was undertaken in a build-operate-transfer contract between the government and CE Casecnan Water and Energy Co., a US Securities and Exchange Commission registered firm.
EO 173 granted independent power producers under BOT contracts with the national government a “reduction and condonation of real property taxes and interests, penalties on power generation facilities.”
The executive order saw the need to condone and reduce real property taxes and interest income because the obligation has been “contractually assumed” by GOCCs, in this case the NIA, which signed an amended and restated project agreement with CWEC on June 26, 1995, a Manila Standard source said, requesting anonymity because he was not authorized to discuss the contract.
Paying a huge amount “would pose a threat to the financial stability of GOCCs,” the source added.
Under the agreement, CWEC is required to provide NIA all the net electrical energy generated, and deliver to the Pantabangan Reservoir all water diverted from the Casecnan watershed. NIA, in turn, pays water delivery and energy delivery fees to CWEC; acting as middleman, it then sells the power to the National Power Corp. at a marked-up price.
Although the NIA-CWEC agreement runs to 2021, the 1995 amended agreement allows the state agency to buy out the private party at any time during the cooperation period.
The Standard’s highly-placed source in the company said CWEC is willing to pay, “but the GOCC who signed the BOT contract (NIA) should be willing to reimburse them.”
Meanwhile, the Bugkalot are historically known as hunters and freshwater fishermen. They were known to spend weeks hunting and fishing by the Casecnan River than tending their kaingin farms.
“Not known to many, the precious Ludong fish, which sells for P5,000 a kilogram, has been extinct in the upstream of Casecnan River because the CMIPP diversion dam blocked the migration path of this exotic fish,” Padilla explained.
Ludong has a life cycle known to traverse the 505-km Cagayan River from the mouth of the Cagayan River in the Babuyan Channel up north to the watersheds of the Casecnan River basin in Dupax del Norte, Nueva Vizcaya. The common eel, also a delicacy among the Bugkalots, has also been rarely caught after the CMIPP was constructed.
“Imagine five kilograms of Ludong catch in a month — a Bugkalot fisherman could just forget about the tax shares,” the governor jested.
Communities downstream of the diversion dam also decried the loss of water as discharge flowing from the Taang and Casecnan rivers are all diverted to the Pantabangan reservoir. Kayak enthusiasts in Quirino province also observed the lowering of the usual water level at the Nagtipunan rapids.
CMIPP is a hydroelectric facility composed of two impounding dams and a power plant, connected by a pair of 26-kilometer diversion tunnels.
The project siphons water from the Taang and Casecnan rivers in Alfonso Castañeda through the diversion tunnels to the Pantabangan Dam in Nueva Ecija. It generates about 150 megawatts of electricity and irrigates 200,000 hectares of farmland in Central Luzon and the western part of Pangasinan.
In a related development, the Standard learned that a court order issued by a Regional Trial Court here effectively stopped Alfonso Castaneda Mayor Gerry Pasigian from “auctioning” the CMIPP for its failure to pay taxes.
Pasigian, himself a Bugkalot, used his power to issue a Mayor’s Permit to compel CWEC to pay taxes, prompting the later to seek the court’s intervention.
Pasigian refused to issue CWEC a Mayor’s Permit after the firm failed to get tax clearance from the barangays affected and the municipal treasury because of its non-payment of real property taxes, which are pending due to EO 173.