News Release

MIRIAM HITS MULTIMILLION KICKBACKS IN STATE ASSETS SALE

“The Epira law orders privatization of the power industry, but we must make haste slowly. If we don’t watch out, those sales could adversely result both in higher electric rates paid by consumers, and in multimillion kickbacks and commissions for certain public officials involved,” Santiago said.
Santiago stopped yesterday apparent efforts by PNOC-EDC president Aquino to secure JCPC approval of the Geothermal Resources Sales Contract for Palinpinon 1 and 2, and for Tongonan 1.
Aquino reportedly tried to convince JCPC co-chair Rep. Juan Miguel Arroyo and the JCPC House panel members to secure JCPC approval before December 5, the date set for bidding of the geothermal fields.

Aquino is already under fire from Santiago and JCPC, for allegedly going behind the backs of the JCPC and securing approval for privatization of the National Transmission Corporation (Transco) from Finance Secretary Gary Teves, as chair of the Privatization Council.

In her letter to Rep. Arroyo, Santiago refused to call an emergency meeting of the JCPC to approve the geothermal contracts, because the price for electricity is set in US dollars instead of Phippine pesos.

“This is the very reason why electricity in the Philippines is one of the highest in the world. Under the contracts, the consumers will again be hit by so-called automatic adjustment mechanisms, which will raise the price of electricity,” Santiago said.

Santiago also denounced the provision in the contracts giving so-called performance incentives for PNOC-EDC in the controversial contracts.

“The performance incentives that PNOC-EDC is giving to itself will of course increase the price of electricity,” Santiago said.

Santiago further hit the contracts, because they index indigenous geothermal resources with coal.

“This indexing has no rational basis and would again give windfall profits to PNOC-EDC, at the expense of the consumers,” the senator said.

Santiago insisted that the controversial issues in the contracts should be fully studied first by the new JCPC members.

“One public hearing, without prior study by the new composition of the JCPC, will not redound to the national interest. The Epira mandate to privatize does not preclude full study of the implications and consequences of each contract proposed by PNOC-EDC,” Santiago said in her letter to Arroyo.

The senator told the Senate media that PNOC-EDC “is becoming suspicious,” because it wants to reach fast-break approvals of multibillion contracts which could involve multimillion kickbacks.

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