Lanao del Norte Rep. Alipio Badeles, committee chairman, said yesterday his panel has been trying to assess what went wrong with the bidding of the plant owned by the National Power Corp. (Napocor) in Masinloc and, in general, how EPIRA is being implemented so it can suggest changes in the law.
However, he said one amendment that his committee is planning to recommend is the setting of a financial and technical capability threshold for prospective buyers of Napocor assets.
"Congress failed to prescribe such a requirement in the law," he said.
He added that his committee would determine, based on testimonies from resource persons, what would be the minimum amount of funds and technical expertise a bidder should possess at the time of bidding.
Rep. Teodoro Casiño of the party-list group Bayan Muna said though there is no financial and technical expertise requirement in EPIRA, the Power Sector Assets and Liabilities Management Corp. (PSALM) should have made sure that the winning bidder of the Masinloc plant had the "kind of money needed to pay for the facility."
He said PSALM, the agency Congress created through EPIRA to sell Napocor assets, should have suspected from the beginning that there was something wrong with winning bidder, YNN Pacific Consortium.
Quoting Sen. Joker Arroyo, who had made inquiries about YNN, Casiño said the company was capitalized at P10 million, of which P625,000 was paid-up or in cash.
"How could a P10-million company offer $562 million for the Masinloc plant?" he asked.
During the hearing of the Badeles committee last Wednesday, PSALM president Nieves Osorio turned the tables on lawmakers, telling them the defect lies in the law they made. She said there was nothing in EPIRA that prohibits small "special purpose" firms like YNN and financial brokers and arrangers from participating in the auction of Napocor assets.
She also said the Masinloc contract was deemed terminated as of Aug. 6, which was yesterday. She could not answer questions on whether PSALM could still legally accept the $227-million down payment from YNN prior to the termination date or whether the agency could give the bidder another payment deadline extension.
YNN has failed to deliver the down payment despite at least two extensions of its payment deadline.
Casiño agreed with Badeles that a minimum financial and technical expertise requirement should be prescribed.
However, he said the law should also be amended to prevent a situation where a bidder’s offer is loaded with kickbacks for corrupt officials, including lawmakers.
In this case, he said it is the consumers who will ultimately suffer since the bidder’s cost would be passed on to them in terms of the amount that he would charge for his electricity.
He pointed out that in the case of Masinloc, YNN would have to recover its $562-million offer, had it not defaulted, through the cost of power it would charge the public.
Casiño also reiterated his call for PSALM officials to return the P10-million bonus that they received for the "successful" sale of the Masinloc plant.
"Mahiya naman sila (They should be ashamed of themselves). That is taxpayers’ money," he said.