Ed del Fonso’s lesson

Edgardo del Fonso, Ed to his friends, is perhaps one of the better known authorities in the country today when it comes to energy sector issues. My peers in the journalism profession had always sought him out to solicit his views on the fate of the National Power Corporation, the power sector privatization program and the looming energy crisis.

Ed is known to speak not from textbook sources but from experience. Having served the government in various senior capacities since the Aquino administration, Ed is an important source of insight and perspective even to key energy officials. Energy reporters say Ed has the unique ability of integrating the technical, financial and political aspects of an energy issue into one holistic view.

Because of Ed’s reputation, his many friends in media and the local business community are so perplexed as to how Ed could end up an apparent victim of business relationships gone sour. How could someone very well seasoned in the corporate world and so well-versed in the language of business be in the losing end of a deal? Was Ed the object of ingratitude, his friends wonder aloud these days.

The story circulating in coffee shops is that Ed came to the rescue of a group involved in a coal mining business in Southern Mindanao.

Ed appeared a logical choice for the group. Ed knew the industry and had extensive relationships within both government and private sector participants. Ed’s intimate circle, however, said he did not only lend his wisdom to the group; he lent millions of pesos of his own money, too. The understanding was, his friends said, the money advanced by Ed would be considered equity, making him a co-owner of the coal mining firm.

Ed proved to be a blessing to the group, they pointed out. Not only did Ed put order into the operations of the group, he also got an extension for the operating permit of the firm. He reportedly poured in millions of pesos and minutes, keeping faith in the group he was helping and in the possible contribution of the coal mining business they were putting up to the overall well-being of the country’s economy.

What then appeared to be the vanilla ice cream topping in the crisp apple pie of a business nurtured by Ed’s talent and money was a prospective deal with a major power company. A very large presence in Asia, this company runs several plants in the country and had just bought a coal-fired plant and needed a steady supply of at least one million tons of coal per year to keep the plants working. At the current market price of $60 per ton, the prospective business stood at a whopping $60 million per year.

Ed’s friends intimated to us that it was during the negotiation for the deal with the power company when conflict began to brew within the coal mining firm. Apparently with the prospect of closing a large and lucrative deal in sight, the group which Ed had helped all of a sudden booted him out as president and declared that Ed did not have a single share in the company after all.

The group, whose principals are strangers to the energy sector, also apparently sent another person to close the deal with the power company. Too bad, this company did not want to talk to anyone else but Ed. So, the coal venture now stands to lose the deal.

What Ed’s erstwhile partners apparently did not know, is that the power company would work only with people whom they trust. Ed earned their trust when, as then president of the Power Sector Assets and Liabilities Management Corporation or PSALM, Ed renegotiated the country’s power supply deal with them. The sobriety and transparency of Ed’s dealings assured them, as well as the owners of other independent power producers, that Ed was always above board and stood by his word in his dealings.

Ed, his friends note, is saddened by the apparent demise of the valued Word of Honor in the conduct of business in the country. Ed also wonders what happened to the time-honored Debt of Gratitude. It appears Ed is facing the hardest business lesson in his life: one should never assume that even his friends and those he has helped would keep their word or uphold the values that are important in the world of business.

Ed’s friends, however, believe that the bigger loss could be suffered by the group which Ed helped and later dumped him. The Philippines, they say, is a small country and word travels fast. The group, they speculate, could end up having doors closed in their faces because of the reputation they have built following the shabby treatment they gave to a respected man who helped them in their time of great need.

Reputation, they point out, is still the most important business capital in the country. You may have the money and the leverage, but if people can’t trust you, they will not go into business with you. Businessmen are always wary of people who do not keep their word and who have little regard for decent human relationships. They fear that what one does to his business partner, he will also do to others.

The insistence of the power firm to deal only with and through Ed del Fonso apparently underscores this principle. Already, the coal venture has lost a major deal. And may have lost the goodwill that comes with its corporate name.

So, his friends hope Ed would have learned his lesson, never mind the expensive tuition he paid for it.

Despite this, Ed will have his good name intact. He will still be sought out for his wisdom and competence. He will still have more business dealings in the future.

Sadly, the same might not be said of the grouped which dumped him. The story about the treatment they gave Ed del Fonso is spreading like wild fire in coffee shops and business circles. They may have succeeded in booting him out of the company. But then again, that may have been like throwing away your best business asset.

After dumping Ed, there are serious doubts others would do business with the group. Our coffee shop friends hope they, too, would learn their lesson.

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