Stop sale of Mindanao hydro plants PDF Print E-mail
Wednesday, 10 November 2010 10:22

Under the so-called EPIRA LAW,  government will have to sell the Mindanao power plants by 2011.That's a few months from now. These will cover principally  the Pulangi 1V hydro plant in Maramag, Bukidnon and the Agus  hydro power plants around Lake Lanao. It’s part of the privatization campaign of  government under the concept that it is best that government turns over   to the private sector operations of the power generation sector  as the latter is more efficient. Power distribution is now, by the way privatized, and in the hands of the National Power Grid Corp, a private corporation.  Another  reason advanced is that the proceeds of the sale of these plants to private buyers can pay off huge debts piled up over many, many years by  the government owned National Power Corporation.     There is also this argument that the reason the power investors are hesitant to come to Mindanao and invest is because the cost or price of power is too low and private investors cannot compete   for as long as Pulangi and Agus plants are in government hands.

Well and good.

However, there are sectors now clamoring that we must ask our congressmen in Mindanao to move for the amendment of the EPIRA LAW so that the mandated sale of these assets will not take place in 2011 which is just a few months around the corner.

Already, I am getting information that there are many investors who are already doing due diligence and checking on data on their plan to participate in the bidding for the sale of these assets. At the same time, there is a growing clamor from Mindanao residents that  selling those “prized gems”of Mindanao will deprive its people of the benefits and comparative advantage of being home  to those rich and bountiful natural resources.

During my rounds during the height of the El Nino last year and while the hydro plants were not generating their normal capacities due to the low water levels, there were already varied voices saying that it will be a big mistake if we sell the plants. The biggest argument is that the take over by private sector groups will definitely increase the price of power in Mindanao. Private investors are profit oriented and  are definitely propelled by business interests and profits hence increase in  price of power is inevitable if they take over.

Keeping the hydro plants in government will definitely moderate any price adjustments of power. The Pulangi and Agus plants will give a mix to the price of power that will keep it lower than what consumers in Visayas and Luzon pay for their electricity.

My view is: let’s not give away our prized jewels that are uniquely found only in Mindanao.  If there are investors, let them invest in the putting up of new  generating plants, whether thermal or hydro. But let’s not give away those that are already our prized possessions.

I was told by some technical people when I visited the Pulangi plant in Maramag that the possible selling price of the Pulangi plant can be recovered only within the period of 12 to 24 months of operations.  My figures may not be accurate but if we sell the plant for 2 billion pesos, it will generate income for the new owners and recover the whole  2 billion buying price  within the next two years. What a prized catch!

On another point. About 53% of Mindanao’s power come from hydro plants which rely on water. Climate change and the possibility of frequently recurring El Ninos will make Mindanao remain at the mercy of mother nature. We saw this last time. Perhaps, there is a need to review our power generation concepts and examine whether keeping the hydro power dominant in Mindanao is still a valid thing. Or we have to give thermal plants more priority. But then, the cost of power will have to be  tuned to this new concept. Thermal plants run on fuel hence they cost more. Indeed,we need to go back to the drawing boards and plan things out.

But whatever it boils down to, selling the Pulangi and Agus hydro plants will be a big loss to us Mindanaoans.

Call or write our Mindanao congressmen. I’m sure they will listen.  (jessdureza@gmail.com)

By Jess Dureza