For one thing, when Manny P and First Pacific took control of PLDT, they too were direct competitors (they owned Smart) and should have been disqualified. The prevailing norm in the industry then and now is merger and consolidation. Only government can object on the ground that the merger creates a monopoly or an industry participant that is so powerful so as to create a virtual monopoly.
It is not clear why First Pacific wants out of PLDT so badly that it is willing to suffer a large loss on their acquisition cost. Manny P didn't do badly and in fact, was responsible for getting PLDT into the modern era. Manny P should be given credit for seeing something as basic as interconnection as an opportunity to make even more money for PLDT. Not only is PLDT now more competitive, it is also competing more fairly.
I think one of the more worrisome consequences of this takeover battle is the possible return of Tonyboy Cojuangco into active management at PLDT. Tonyboy should be history, part of an era best forgotten of telecoms monopoly and unfair competition. There is worry that even if Manny P remains CEO of PLDT, he will no longer have the same room for innovative and transparent management. Service could suffer for PLDT's customers and so would corporate governance for PLDT's small shareholders. The heft of PLDT could again be used to finally crush what is left of competition.
In a sense, customers, shareholders and competitors could be better off with someone like Lance Gokongwei on top of PLDT. At least in the case of Lance, he is likely to maintain the new orientation of PLDT introduced by Manny P. He will assure a competent and fresh approach in managing a telecoms company in today's era of e-commerce.
It is also interesting to watch and see if the Gokongweis will be able to introduce their legendary bare-bones type of operational efficiency in PLDT. Such prudence in costs translates to consumer benefits in the long run. Despite Manny P's valiant efforts to date, PLDT is still way too fat an organization for a company in the beleaguered telecoms industry.
Manny P has started to cut PLDT down to a more manageable size but he needs time to get the work done. In fairness, PLDT is no longer as seriously bloated as it used to be and the customer orientation of its office and field staff has improved significantly (based on my experience). But it needs to be more nimble in today's environment. In a sense, Manny P's work has only just begun.
The transparent management style of Manny P in such things as procurement had also been a positive factor for investors. PLDT under Manny is a major force in Bayantrade, an e-procurement venture that has cut costs to the bone. If they manage to stop the Gokongwei takeover, I wonder if Manny P can still stop a return to the bad old days, given that he must now live with his coalition partners. Ideally, JG should retain Manny P for much-needed continuity.
The one good thing about the JG Summit bid is that PLDT will once again be in the control of Filipinos. Actually, who owns PLDT shouldn't really matter but we do have a law that mandates Filipino control. That law is honored only in the breach. We ought to get that requirement out of our Constitution or hope that a Filipino group can afford to buy control of PLDT. I am not sure exchanging Indonesians for Japanese makes a difference.
In the meantime, let us just watch and enjoy this battle for corporate control. Things have been so boring in the business scene lately, we deserve this unfolding entertainment.
He explained that the "minimum energy off-take" (take or pay) provision became standard in IPP contracts because it was the only way bank financing could be secured. He observed that from hindsight, it is easy to blame Ramos but if one considers the parameters for decision at the time, one would have made the same decisions."
The IPPs solved the blackouts, he pointed out, and additional IPPs were brought in as "insurance capacities" to make sure the blackouts will not recur. He explained that "it was the thinking then that a surplus power problem would be easier to solve than a power shortage problem." I guess they never imagined the problem we have today.
The former Napocor official, however, also pointed out that both the Ramos and Estrada administrations made mistakes. "In Mindanao, a 100-MW diesel plant was installed when Corporate Planning studies estimated 30 MW would suffice. Also, a 50-MW diesel plant was installed in General Santos when a lower capacity would have sufficed. The plant they needed there is for voltage control, not to meet power requirements. The power surplus was aggravated by the closure of National Steel in Iligan – resulting in more PPA."
It is apparent that somewhere along the line, the ex-Napocor official writes, construction of power plants ceased to be coordinated properly. It is an interesting question and the answer may be disturbingly political in nature. This is the crux of our problem. This is why I think Ramos era Napocor and Energy officials have some explaining to do. Why did this happen?
Our letter writer warns that "the end of the problem is not in sight. The 345-MW San Roque Hydro Plant was ordered rushed to satisfy then President Estrada’s desire to personally switch it on during his administration. Instead of coming on stream in 2005, it will be ready in the first quarter of 2003. This will aggravate the surplus power and the PPA problem. After this, the 1,200 MW Ilijan gas plant will come on line. The plant capacity curve is leaving behind the demand curve and as the gap widens, the PPA increases."
It is definitely a more complex problem that defies the simple solutions offered by publicity hungry politicians and leftist firebrands.
Mary: So at the end of our first date, he told me he wanted me for a friend.
Jill: All right.
Mary: Yeah, but on the second date, he brought the friend!
(Boo Chanco's e-mail address is bchanco@bayantel.com.ph)