IMC partner must have extensive experience, competence, and proven track record PDF Print E-mail
Friday, 27 July 2018 11:57

LOOKING IN

BY ROD BALBON

Financially-troubled Zamboanga City Electric Cooperative (ZAMCELCO) will finally be awarding the Investment Management Contract (IMC) to a chosen partner on August 2, after two bidders submitted letters of intent—Aboitiz Power Corporation and Crown Investment Holdings, Inc.

Meralco-Comtech, the first winning bidder, backed out when it bucked down the NEA’s 8.5% systems loss which was accordingly very hard to achieve considering the systems loss of Zamcelco that they’re taking over is a very high 25%.

Recall that the city government called for a meeting last week, which was attended by local officials and representatives of Zamcelco, to discuss its ailing financial condition and wherein one of its suppliers, the Alsons Group’s Western Mindanao Power Corporation (WMPC) vowed not to cut its power supply, as earlier announced since Zamcelco has started paying its outstanding dues of more than P258 million. WMPC supplies half of the city’s power demand of 50 megawatts. The other Zamcelco power suppliers are Power Sector Assets and Liabilities managerial Group, Enfinity Philippines, and San Miguel Power Corporation with total collectibles of P948.5 million. It was also revealed during the meeting that Zamcelco’s monthly collection is P370 million and is operating at a systems loss rate of 22%. Why it cannot lower such loss, Zamcelco Manager Edgardo Ancheta disclosed that “the cooperative is intensifying anti-pilferage campaigns and pursuing restructuring schemes to meet its obligations.” According Board Member Rikki Lim, Zamcelco is losing roughly P20 million monthly due to systems loss.

These financial concerns are very vital that need to be included in

Zamcelco’s new attempt for an IMC, according to Congressman Celso Lobregat. He said that “the new ruling of the Energy Regulations Commission (ERC) should include in the terms of reference and the bidders should have the track record on running power distribution”. In relation to this, Zamcelco Manager Ancheta expressed that the “IMC is the best move to resolve its financial difficulties.”

And this is where the problems will continue to hound us if the winning IMC partner will be wrongly chosen.

Looking at the two new bidders, Aboitiz Power Corporation has the inside track. It already has the track record in supplying power to major cities like Cebu and Metro Manila. As per my very well-informed source, the Crown Investment, Inc. (hereinafter Crown) is owned by Party-list PACMAN Congressman Mikee Romero. It is primarily engaged in port operations. It has a team—Globalport—participating in the PBA Basketball Conference. As per further research, a big man of San Miguel Corporation bought shares of Crown and is now a substantial owner of the company. We can surmise that Crown, primarily a port operations corporation, is just fronting for San Miguel Power.

It is here when our Zamcelco officials should be wary and should not entertain potential IMC partners with very little experience and a questionable track record in power distribution. Partners such as this may lead to a situation where Zamcelco’s massive problems will not be solved but will only make its financial situation graver and incurable.

A case in point is that of the Albay Electric Cooperative (Aleco). After almost four (4) years after the NEA had placed Aleco under the operation of a private firm—Albay Power and Energy Corporation (Apec), a firm controlled by San Miguel Corporation, disgusted consumers complained that nothing has changed after their provincial officials, led by Gov. Joey Salceda, virtually gave the green light for Aleco’s operation in the hands of Apec to save it from being drowned by its P4 billion outstanding debt incurred with NEA and other energy suppliers. Unending woes brought about by recurrent power blackouts and inefficient service which led the new Gov. Al Francis Bichara in taking a bold step by filing a class suit against Apec.

A month after assuming control of Aleco, then Apec General Manager Allan Marchan assured NEA and the LGUs of Albay that they would provide “the best and most impressive power service in the Albay under Aleco.” Adding to the woes of the Bicolano power consumers, they were shocked by strong electric outburst, sending shocked and forcing panicked residents to rush out of their residences. Power lines within their subdivisions last June 6 burst into sparks and flames that damaged appliances. The frequent power failures were made worse by poorly established power lines and inefficient linemen.

It was in January 2014 that Apec, owned by San Miguel Corporation, took over operation of the beleaguered and cash-strapped Aleco after besting four other giant power companies, to include Aboitiz and the Gokongwei Group, in a bidding for the supply of power of the coop’s 50-year concession contract. Attesting that a takeover private company was the only option to save Albay from total power shut off, then Gov. Salceda in 2012 pressed for the resignation of the entire Aleco Board members and its place, created the Aleco Interim Board of Directors headed by Legazpi Bishop Joel Baylon, whose primary task was to formulate  policies, rules and regulations governing the operation of the power coop by a private corporation.

After four (4) years, the 23,000 member-consumers are now asking the political kingpins of the province, including the two Albay Party-List lawmakers of their next moves on how to solve their predicament, after backing strongly Aleco’s privatization. Even the fiery voice of Bishop Baylon who was in the frontline for the takeover by Apec can no longer be heard. Signed manifestos issued by the Albay Chamber of Commerce and from the 50 priests from the Diocese of Legazpi, strongly criticized the dismal services of Apec. The Aleco Union officials accused Apec of incompetence in handling trouble-shooting and even minor electrical connection rehabilitation and repairs. Consumers complained that it has become unbearable and desperately deplorable that after long years, Albay continues to suffer intermittent brownouts, including the regular scheduled whole-day brownouts under Apec, and their failure to receive the latest billings, which are always erratic, for the past two years.

Knowing the style and characteristics of Zamcelco’s official, especially the Board of Directors, we hope that the final choice they’ll make to turn around their ailing electric cooperative will not be tainted by monetary considerations. They should exercise wise judgment and choose an IMC partner with extensive experience, competence, and a proven track record in power distribution in the mold of Meralco and Aboitiz.