NBN scam’s tong-pats resurfaces, miffs Malacañang

Pro-Meralco ad blackmail — Palace

By Sherwin C. Olaes

05/11/2008

Malacañang accused the Lopez-led management of electricity distributor Manila Electric Co. (Meralco) of engaging in blackmail over a full-page advertisement that appeared in major daily broadsheets the other day insinuating that state-owned National Power Corp. (Napocor) is being allowed by the Arroyo administration to sell electricity at padded prices.

The advertisement which did not indicate who paid for it, carried a table which shows that Napocor’s 49-percent share in Meralco’s electricity purchases were priced the highest at P4.76 per kilowatthour (kwh) on contracted sales and P6.02 per kwh on purchases from Napocor power plants through the spot market in the first quarter of the year.

The advertisement was titled “Walang Tong-Pats ang Generation Charge ng Meralco” (The generation charge of Meralco is not padded).

Tong-pats was a term popularized by Senate witness Dante Madriaga, a former consultant of China’s ZTE Corp. for the National Broadband Network project, referring to the code for the multimillion-peso kickbacks in the anomalous project.

The advertisement proceeded to ask “Sino Kaya ang may Tong-Pats???” (so who engages in padding???).

Malacañang expressed annoyance on the advertisement and accused the Lopez-led management in Meralco of blackmail over what it considered as a threat to expose individuals in the Arroyo government who are involved in kickbacks or tong-pats.

Chief Presidential Legal Counsel Sergio Apostol, nevertheless, said the Palace was not threatened by such intimidation but he issued a challenge on “those personalities who financed the paid advertisements to name names.”

“They should come out in the open, whoever finance this advertisement materials, they should name names so we could prosecute the erring fellows in courts,” he said.

Apostol said President Arroyo never tolerated corruption and is interested to know who “milked” electricity users of money through what the Napocor’s charges of high rates to Meralco,.

“We’re interested to know who receives this tong-pats…Sino kaya iyon? Abangan natin sunod na ads (Who is this person who received the alleged kickbacks, lets wait for the next advertisement),” he said.

Napocor president Cyril del Callar disputed the figures that appeared in the advertisement.

He said Napocor’s prevailing average rate outside the Meralco area is about P3.63 per kwh.

Napocor’s prevailing rates in Northern Luzon, Central Luzon and Southern Luzon are P3.82 per kwh, P3.26 per kwh and P3.89 per kwh, respectively, he said.

“Meralco accounts for 75 percent of power purchases in Luzon,” Del Callar added.

He assured Napocor will inform Congress about its true selling rates, however.

“We’ll bring out during the congressional hearing what these are,” he said.

He noted Napocor can’t overcharge since Energy Regulatory Commission regulates its rates.

Apostol stressed that if the Lopez-controlled Meralco comes out with such threats because GSIS general manager Winston Garcia wanted to unearth syndicates in its leadership, by pressuring the power distributing firm to disclose their books of accounts, they were wrong.

“The government would not be intimidated by such threats. This is blackmail…if the Lopez family is behind this they should pinpoint who among government officials receive tong-pats,” he said.

Apostol also turned the table against the Lopez family blaming them why Napocor charged Meralco P6.02 kWh.

“This is their fault…they’re buying electricity at the Wholesale Electricity Spot Market during peak hours…anyway whoever in the government is in conspiracy with their (Meralco’s) erring officials we’re interested to know, the Arroyo government is serious in its drive against corruption, the President never tolerates corruption,” he stressed.

Deputy presidential spokesman Anthony Golez said what got the Palace’s attention in the advertisement was the use of the word “tong-pats”.

“Alam nyo bang walang pinapatong na kahit isang sentmo ang Meralco sa inyong generation charge? (Do you (public) know, Meralco does not charge you, not a cent of padded price on your generation charge?” the advertisement added.

The term cropped up during the Senate investigation into the NBN-ZTE scam in which former Commission on Elections chairman Benjamin Abalos Sr., and First Gentleman Jose Miguel “Mike” Arroyo was linked to huge kickbacks and commissions from the $329 million deal.

Golez said the counter allegations raised by the Lopez camp, majority shareholders of Meralco, in their advertisement should be seriously probed by the ERC and GSIS president General Manager Winston Garcia, who owns bulks of the government’s 33 percent stake in the power distributor.

“When it comes to that tong-pats (kickbacks) issue, its now high time that Meralco become transparent and the GSIS is already coordinating with them. We’re now leaving this issue to the GSIS and the ERC to address it. The stand of the government through the GSIS is clear, that there should be transparency, on who earns tong pats or who had not received tong pats,” he said.

The advertisement also stated that Meralco buys electricity at lower rates from its affiliate independent power plants. Meralco buys 28 percent of its electricity supply from Sta Rita power plant at P4.16 per kWh; 15 percent from San Lorenzo at P4.17 per kWh; and eight percent from Quezon Power at P4.66 per kWh.

The power plants are owned by First Philippine Holdings, which is the power plant operator unit of the Lopez group.

Golez explained the rate being charged by Napocor through WESM of P6 to P9 per kWh is expected because Meralco buys from the spot market at peak hours.

“They (Lopez group) are buying electricity at WESM during peak hours, at high noon towards the evening, when most uses air conditioning units and other appliances,” he stressed.

golez said the Arroyo government would not stop until Meralco open their books of account, and at the same time take necessary actions to lower the power rates.

Golez said the government were also looking over the allegations that Napocor had made an overcharge of P10 billion.

“We have not yet heard the side of the Napocor on this issue not unless (Department of Energy) Secretary Angelo Reyes is already talking with them. But nevertheless, we’re leaving this matter to be address by the DoE and the ERC,” he said.

State pension fund GSIS, meanwhile, said it may still pursue its plans to file criminal and civil charges against Meralco.

“GSIS can possibly resort to such action if Meralco continues refusing full disclosure of contracts it entered into,” the agency’s senior vice-president for legal affairs Estrella Elamparo said.

She noted GSIS can scrutinize Meralco’s records since it has a 25 percent stake in the company.

“We want to make sure the contacts aren’t disadvantageous to Meralco,” she said.

If Meralco insists on withholding information from GSIS despite the latter’s repeated request, she said the agency will decide in due time about whether to pursue such charges.

She said GSIS suspended this week filing of these charges after the Lopez group, which owns 33.4 percent of Meralco shares, announced the agency can buy it out of the company.

GSIS is seeking to discuss this matter with the group before Meralco stockholders meet on May 27.

Among matters GSIS wants to examine is the $148 million contract for purchase of natural gas from the Malampaya reserve.

“Four independent power producers of Meralco bought natural gas which wasn’t used but based on the settlement agreement reached last year, such purchase cost will be passed on to Meralco which will, in turn, pass this on to its consumers,” Elamparo said.

She also said GSIS wanted to examine some P140 billion worth of debt-to-equity conversion and other deals Meralco entered into with several companies related to it.

“We’re encountering difficulty in securing documents, however,” she said.

During Kapihan sa Sulo forum, Elamparo clarified GSIS has no plans of taking over Meralco as its General Manager Winston Garcia’s call is for a change in management of this company.

“GSIS’ concern is to protect its interest and that of its 1.3 million members many of whom are also customers of Meralco,” she said.

Del Callar also issued a challenge on Meralco to explain why it buys power from the agency during peak hours when rates are high.

These hours are from 8 a.m. to 10 a.m. and 2 p.m. to 4 p.m. Mondays to Saturdays.

He said Meralco can purchase Napocor-produced power during off-peak hours when rates are lower.

“Meralco should explain why it buys at high prices,” he said.

Tribune wires

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