"Ultimately, we (consumers) pay all power costs, including padded insurance premiums," Nasecore president Pete Ilagan said, in a paper faxed to energy reporters yesterday.
"As Sen. Sergio Osmeña III suggested, perhaps Napocor is better off managing its own risk, as it has been paying for it anyway. On second thought, it is not Mr. Alcordo but the consumers," who are paying for these costs," he said.
President Arroyo even tried to intercede by creating a joint bidding committee, which a few days ago, failed to convince bidders to participate in the public auction. The bidders, allegedly, were not given enough time to study their bids and the international insurance markets is bearish because of the Sept. 11 bombing of the US prime districts.
Ilagan pointed out that the government should zero in on the main issue of unaccounted insurance premiums. "GSIS cannot now account the discrepancy in risk coverage ($10.5 billion to $200 million) and the missing $8-million premium ($12.9-million GSIS charged Napocor less $4.9 million actually paid to known reinsurers). GSIS booked $1 million as its share in the $13.9-million premiums for five percent of the risk.
He also noted that on top of the $47-million insurance premiums paid over five years, Napocor has had to shell out over $70 million for repair and rehabilitation of covered damage and loss, because GSIS has so far paid a measly $1.6 million on Napocor’s insurance claims.