Casecnan dam owner settles P1.7-B tax

BAYOMBONG, Nueva Vizcaya, Philippines – A US firm, which owns the Casecnan multipurpose irrigation and power project here, has agreed to pay more than P1.7 billion in taxes that it owed to the provincial government.

The provincial government said that a new agreement it signed with California Energy, which operates the Casecnan project, guarantees that the company would settle its tax arrears in  staggered payments until 2016.

Rhoda Moreno, acting provincial treasurer, said the amount represents the company’s unpaid property taxes since 2007.

The $580-million Casecnan project, which has been operating for the past 14 years, was constructed during the Ramos administration under a 20-year, renewable build-operate-transfer deal with the US firm.

The project siphons water from the town of Alfonso Castañeda here to the Pantabangan Dam in Nueva Ecija for the irrigation needs of more than 200,000 hectares of farmlands in Central Luzon.

The project also generates 100 megawatts of electricity to augment the power requirements of the Luzon grid.    

“The payment scheme is a major feature in order to renew and extend the company’s new interim agreement with the provincial government. The existing interim agreement will expire this November,” Moreno said.

Under the new agreement, she said, the firm has to pay 25 percent of the unpaid tax before the old agreement expires and 50 percent of the balance before the end of the year, and the rest in quarterly installments until September 2016.

The provincial government earlier threatened to shut down Casecnan’s operation and auction its facilities due to the owner’s alleged refusal to settle its tax obligations.

Moreno said they even asked the help of the Department of Finance (DOF) for a dialogue with Casecnan project officials and other stakeholders, including the National Irrigation Administration (NIA), for the settlement of the tax issue.

The DOF has the authority to compel the US firm to comply with its tax obligations.

The NIA oversees the operation of the project’s irrigation component.