Blame Meralco for failed IMC PDF Print E-mail
Wednesday, 27 June 2018 14:23



In so many words, we have implored the Manila Electric Company (MERALCO) to expedite the approval of the Investment Management Contract (IMC) with the Zamboanga City Electric Cooperative Inc. (ZAMCELCO) as the actuarial computations for such would reach an unrealistic level if the IMC is further delayed.

Zamboanga desperately needs MERALCO to provide ZAMCELCO much-needed expertise and financial backing to raise the Titanic, so to speak, now down with a whopping TWO BILLION-Peso debt. From my reliable sources, ZAMCELCO can hardly meet its obligations to power generators Infinity, SMC Global Power, TMI and WMPC which have been providing power to Zamboanga despite barely being paid by ZAMCELCO. In fact, ZAMCELCO owes WMPC (Western Mindanao Power Corp.) almost half-a-billion pesos. Moreso, WMPC, abiding by its sworn mission to provide power to ZAMCELCO, has been advancing the cost of diesel fuel it consumes to power the engines of its plant to generate electricity.

The patience exercised by these power generators is commendable, to say the least, particularly WMPC, which provides more than half of the the city’s energy requirement.

If the IMC fails, or if MERALCO withdraws its bid to manage ZAMCELCO (and reports reaching me suggest that MERALCO has in fact withdrawn its bid), MERALCO is to be blamed for the setback, because it is taking MERALCO six months to decide whether or not to sign the contract to manage ZAMCELCO.

Critical events have overtaken the IMC signing. Very recently, the Energy Regulatory Commission (ERC) issued a resolution directing all electric cooperatives in the country to bring down the level of systems’ loss to 8.2 percent, from the previously allowable SL of 13.5 percent. ZAMCELCO’s SL is about 23-25 percent. Based on the mathematical computations of MERALCO on the former figures, the management of ZAMCELCO for 25 years is financially feasible. But the new SL limit will make it unprofitable for MERALCO even in the long term.

Nevertheless, MERALCO’s turtle’s pace in approving the IMC deal with ZAMCELCO will spell CATASTROPHE for ZAMCELCO which will effectively translate in the near future to power interruptions.

Mr. Performance, Manny V. Pangilinan, should kick his people’s butts for delaying the signing of the contract with ZAMCELCO. HE WILL BE BLAMED FOR THE MESS. When the patience of the power generators run out, they may just pull the plug on ZAMCELCO.

This is what’s going to happen if the IMC fails. ZAMCELCO will hold another IMC bidding, the process of which may take six months. Or, NEA (National Electrification Administration) can take over ZAMCELCO and drive it closer to the seabed as was the experience in the past. Or, MERALCO’s godfather, MVP, can be convinced that his investment with ZAMCELCO is safe and sure-fire with an amended actuarial computation that is beneficial to MVP, ZAMCELCO and the consumers at large.

Mr. MVP, the consumers cry once more: HELP US. YOU ARE OUR ONLY HOPE!