Binga deal aboveboard - Napocor

The state-run National Power Corp. said yesterday it saw nothing wrong in recommending a multimillion-peso settlement on a power contract that has been found to be one of the most onerous entered into by Napocor.

"As far as Napocor is concerned, the decisions we’ve taken on the matter were aboveboard and legal," Napocor president and chief executive officer Roland Quilala said in an interview. He did not elaborate.

Quilala was reacting to a report by the Philippine Center for Investigative Journalism (PCIJ), that businessman Catalino Tan is about to get P700 M in settlement claims — which, Napocor officials said, the government still owed him — over the rehabilitation of the Binga hydroelectric plant in Benguet even though he abandoned the $143-million project four years ago.

The report said Tan, a member of the ruling Lakas party and close to both President Arroyo and former President Fidel Ramos, has been using his political connections to get back the contract.

"The recommendation comes in the midst of controversies surrounding overpriced power plant contracts and has been attributed by insiders at the Binga plant and at Napocor to the businessman’s political connections," the report said.

"Insiders assert that Tan’s being a childhood friend of Ramos and his generous contributions to Ramos’ presidential campaign and party, Lakas, in 1992 were major factors in his winding up with the multimillion-dollar contract."

Now that Lakas is back in power, "Tan is at it again, and has been using his connections to Lakas, the dominant party in the ruling coalition, and the First Couple, as well as calling on old friends in the Napocor and lawyers identified with Ramos adviser and now Supreme Court Justice Antonio Carpio," the report continued.

Quilala said Napocor has not yet settled the P700-million claim of Binga Electric Power Inc. (BHEPI).

He said the decision whether to recognize or not the claims of BHEPI lies in the hands of other government agencies. "The decision whether to honor or not BHEPI’s claims is not for the state-owned utility to make," he said.

He noted that, at present, all issues pertaining to independent power producer (IPP) claims settlements are endorsed to the Inter-Agency IPP Contracts Review Committee.

"The Inter-Agency IPP Contracts Review Committee has assumed jurisdiction of the settlement claim after the Napocor board referred the matter to the review committee for appropriate action," Quilala said.

He said Napocor sent the transmittal addressed to the review committee chairman, Finance Secretary Jose Camacho, and board member Justice Undersecretary Manuel Teehankee on Sept. 4.

"We requested that the committee include in its review and consideration the proposed settlement between BHEPI and Napocor to ensure that any decision on the matter will be in accordance with the recommendations it will submit in relation to the Binga contract," he added.

He pointed out that BHEPI would not receive any financial claim from Napocor until the review committee has come up with a ruling.

"The (PCIJ) report is premature and preempts the ongoing review being done by Secretary Camacho’s committee on the settlement claim," he said.