FVR ready to face Masinloc probe

Former President Fidel Ramos yesterday said he is ready to face a congressional probe into the controversial sale of a 600-megawatt power plant in Masinloc, Zambales to YNN-Pacific-Ranhill Berhad.

Ramos’ name was dragged into the case when Sen. Miriam Defensor- Santiago hinted at the possibility of calling him to a Senate hearing on the Masinloc deal. In earlier news reports, Senate Minority Leader Aquilino Pimentel Jr. and Sen. Sergio Osmeña III also insinuated Ramos’ involvement in the transaction.

Ramos denied involvement in the contract, saying he does not know the people who own and manage Ranhil Berhad.

Still, Ramos said he is willing to attend a Senate hearing on the matter.

"I am, as always had been in the past, prepared to appear before any congressional or Senate committee to help get to the truth of the matter and to clear my name in the controversy. But, I hope they do their homework well. Is this ‘guilt by association’ in the eyes of legal luminaries who are also senators? I hope not," Ramos said in a statement.

He slammed the three senators for using "unreasonable logic" in linking him to the Masinloc Power Plant transaction.

‘It looks like they relied mainly on the use of a very strange and very strained logic that, because among the shareholders of Ranhid Berhad are officials of UMN0 (Malaysia’s ruling party) and because UMNO has so called ‘ties’ with Lakas-NUCD-UMDP which was founded by FVR, therefore, FVR has links with Ranhill Berhad and had something to do with the subject Masinloc power plant transaction," Ramos said.

"I do not have any direct or indirect involvement or interest, past or present, in the Masinloc-YNN-Ranhill Berhad transaction. Also, let us not cast undue aspersions on the UMN0, which is headed by Prime Minister Abdullah Badawi, our strong Asean partner," Ramos said.

0n the other hand, Ramos reiterated that the EPIRA law passed by the 12th Congress is basically defective and "in its present form, would not facilitate the privatization of NAP0C0R’s assets which have long been offered for sale and therefore needs to be amended to remedy the law’s faulty provisions."

Meanwhile, the House energy committee was told yesterday that the controversial contract for the state-owned Masinloc power plant is deemed terminated on Sunday, Aug. 6.

Power Sector Assets and Liabilities Management Corp. (PSALM) president Nieves Osorio informed the committee that her agency has issued a "notice of termination of the asset purchase agreement (APA)" or contract to the winning but non-complying bidder, YNN Pacific Consortium.

0sorio said the notice was sent last July 7, a week after YNN failed again to deliver the $227-million down payment despite at least two extensions of its payment deadline.

She said under the purchase agreement, the government is required to notify the bidder of the termination 30 days before it takes effect.

"The effective date of termination of the APA is on Aug. 6, 2006," she said.

She also told the committee that PSALM has confiscated YNN’s performance bond of $14 million on July 3 for its repeated failure to deliver the downpayment.

PSALM is the corporation Congress had created under the Electric Power Industry Restructuring Act (EPIRA) to sell the assets of the National Power Corp.

Asked by committee members whether PSALM could still accept payment from the bidder before the notice of termination takes effect on Sunday, Osorio could not give an answer, saying she is not a lawyer. She asked her agency’s legal counsel, Luz Caminero, to respond instead.

But Caminero could not categorically say whether PSALM could still legally accept payment.

"The PSALM board has the option but it is not obligated to do that," she said.

She gave the same answer when asked if the agency could still legally grant a new extension. However, Lanao del Norte Rep. Alipio Badelles, energy committee chairman, expressed doubt on whether PSALM could accept the down payment, assuming YNN comes up with it, or grant another extension of the payment deadline after serving a notice of termination of the contract.

"You cannot do that because that would be inconsistent with your decision to terminate the contract and your service of a notice of termination," he told Osorio.

Albay Rep. Joey Salceda, a member of the committee, said PSALM officials are creating problems for themselves by bending their own rules.

"Stay out of trouble by sticking to your contract and rules. You cannot keep extending this without compromising the national interest," he said.

Rep. Teodoro Casino of the party-list group Bayan Muna said PSALM has already bent its rules just to accommodate YNN. He said he could understand the fact that the government wanted YNN to make good its $562-million offer for the Masinloc plant, "but it was too high and too good to be true."

Meanwhile, Senate Minority Leader Aquilino  Pimentel, Jr urged Malacañang and energy officials to purge the privatization of the power sector of bogus industry players by immediately terminating the contract of the YNN-Pacific-Ranhill Berhad.

Pimentel called for the rejection of the request by YNN-Ranhill Berhad for another extension of the deadline for settling the $227 million downpayment to Sept. 30. The last deadline expired June 30.

He said the final cancellation of the purchase contract by the PSALM will spare electricity consumers the threat of higher power rates that YNN Pacific and its Malaysian partner, Ranhill Berhad, are expected to demand in order to recoup the unusually high cost incurred in acquiring the coal-fired plant.

Sen. Joker Arroyo told reporters yesterday he would suggest that members of the Joint Congressional Power Commission (JCPC) vote on the issue when it meets anew Thursday to "put a closure" to the Masinloc deal.

Arroyo said the case has been dragging for the past two years.

YNN Pacific, headed by businessman Sunny Sun, was awarded the contract in 2004 after it offered to buy the Masinloc plant for $561 million. PSALM put a tag price of $388 million for the power plant. The second highest bidder, the Lopez-owned First Generation Holdings, offered a bid price of only $280 million.

Pimentel said that after PSALM confiscated YNN Pacific’s performance bond of $14 million when the June 30 payment deadline lapsed, its next logical course of action was to invalidate the asset purchase agreement and conduct a rebidding.

"If there is a new bidder, PSALM should subject Masinloc plant to another bidding. And the bidding should be public and transparent. Otherwise, PSALM officials should be charged for being remiss in the performance of their duties," he said. — Jess Diaz, Christina Mendez