Other options eyed for $6.5-B reinsurance of Napocor assets

Enery Secretary Vincent S. Perez has recommended to President Arroyo a negotiated contract for the $6.5-billion Industrial All-Risk insurance policy for state-owned National Power Corp. (Napocor).

Perez said that he and Finance Secretary Jose Isidro Camacho had written a memorandum to President Arroyo regarding this option.

In that memo, the two Cabinet members informed the President that "in view of the two failed biddings, they are asking the permission to allow the Joint Bidding Committee (JBC) to explore other options at the soonest possible time, including a negotiated contract and a captive company."

However, Perez said they have still have to get the approval of the President as to whether she would allow the JBC to go into a negotiated contract with interested parties.

"I have to confer with the President about that. I still have to talk to JBC chairman (Finance undersecretary Antonio Bernardo)," Perez said.

In Memorandum Order No. 30, President Arroyo ordered the creation of a Joint Bidding Committee to conduct the public bidding for the reinsurance of the properties of Napocor insured with the Government Service Insurance System (GSIS).

The order was issued to end the squabble between the Napocor and GSIS as to which government agency should handle the bidding for the reinsurance of assets of the state-run power generation firm.

The bidding committee is composed of the secretary of finance (as chairman); two GSIS representatives who shall be the general manager and senior vice president of the pension fund; two representatives from Napocor who shall be the secretary of energy and the Napocor president (as voting members); and Napocor’s resident Commission on Audit (COA) auditor.

It was noted that since there would be no bidding to be conducted, the committee will no longer be needed, unless the President orders it to continue to function for the negotiated contract.

The second bidding of the reinsurance coverage, scheduled last Nov. 19, failed anew as no insurance brokers were able to meet the 100-percent mandatory requirement under the Terms of Reference (TOR).

JBC chairman Bernardo said they are likely to push for a negotiated contract since this can be the easiest and the fastest mode to get the basic reinsurance coverage for Napocor’s assets.