Shortage

If we manage somehow to reach 2016 without serious power shortages, that will be a stroke of good fortune.

Our energy security has been managed with so much mediocrity. As in the case of transport infrastructure, nothing has been moving in terms of attracting enough investments in new generating capacity to meet rising demand.

Our economy cannot simply go on expanding at more than 6% each year without supplementing our generating capacity — ideally with technology to bring down power costs rather than cause the power price spikes we are now experiencing.

For so many decades, power costs in our economy served as a major hindrance to industrial investments. We have one of the highest power costs in the world. That is the reason our manufacturing sector hollowed out, pushing up unemployment and widening poverty.

We do not seem to have a strategy to improve our power reserves dramatically and drastically bring down costs. Or, at least, we do not have a properly executed strategy.

Only by bringing down the costs of power can we pave the way for the creation of quality industrial jobs. For as long as our power is ridiculously priced, our manufactures cannot compete. Cheaper imports will flood our domestic market. Jobs will be scarce.

We began to lose our labor-intensive manufacturing enterprises when power costs began to climb and when power supply began to be problematic during the presidency of Corazon Aquino. We never recovered since then. Unemployment has become chronic, relieved only by exporting Filipino workers to the rest of the world.

One watershed policy decision made during those years was to mothball the Bataan Nuclear Power Plant. After sinking billions of dollars in borrowed money to build this plant, it has not generated a single watt of power. On top of that, we spent billions more keeping the plant mothballed.

A final policy decision must be reached on this. If we do not want to go nuclear, then we should bring in investments required to transform this facility into a coal-fired plant. If we are still open to using nuclear power — the cheapest and most reliable energy source — then let us conduct the public debate and arrive at a consensus on this.

The longer we allow this matter to dangle, the nearer we will be to a new round of power shortages akin to the one during the Cory Aquino presidency, brought about by absolute lack of foresight and total policy chaos.

Savior

If operations at the LTO have not descended into the complete mess it might have become, it is because the agency’s private partner Stradcom Corporation chose to continue working even if it was not paid. This is a remarkable case of corporate patriotism in the face of bureaucratic folly.

When Virginia Torres descended upon the LTO at the dawn of this now exhausted administration, it was like a super typhoon making landfall. She brought hate, confusion and policy uncertainty to the agency — eventually upending all its operations.

Today, post-Torres, the agency is still lagging in rehabilitation. There are still no car plates for new vehicles and not enough stickers for registrants. Once, Torres tried to return drivers’ licenses to paper form. Most destructive of all, she went to war with the agency’s information technology provider, using one quibbling excuse after another to deny Stradcom its due share of the computerization fees the LTO collected.

If Torres was a curse upon the agency to which she was assigned, she was definitely a devil’s test for Stradcom’s corporate mettle.

From the last quarter of 2010 (when Torres led a mob attempting to forcibly occupy Stradcom’s office) to February 2013, the LTO withheld from its IT provider P3.1 billion in revenues due it. When Stradcom’s contract expired February 2013, the company was asked to continue working because the LTO had failed to find another company to do the job. Since February last year, the LTO owes Stradcom an additional P1.9 billion.

Torres used the flimsiest excuses to deny Stradcom its due share. The company had to borrow (and absorb the interest expenses) to continue its services.

The continuity of those services is vital. The LTO processes 70,000 transactions each day. If computer services stopped, there will be riots in car registration and license issuance centers nationwide.

With the efficiency of computerization, LTO’s own revenues climbed to P15 billion annually. That volume of transactions happens only with Stradcom’s information technology architecture.

Stradcom was established 16 years ago this week with support from the World Bank’s International Finance Corporation to assist in computerizing our bureaucracy. The company invested an initial P4.2 billion just for the LTO’s computerization. It has since invested an additional P300 million in upgrades and improvements.

To date, the LTO has yet to release Stradcom’s share of revenues despite all the court rulings ordering the agency to pay up. The company struggles to meet its overhead costs. The company’s harrowing experience under Torres discouraged other potential PPP investors.

The LTO is conducting a third bidding to find a company to replace Stradcom (which decided not to bid). No one seems interested in participating in that bidding because of its unhealthy terms. Not only will any new provider raise the funds for a new IT architecture, government seeks to retain all earnings, foreclosing the constant upgrading all computer systems need to do.

Meanwhile, tried and tested Stradcom continues to do its job on the basis of short contract extensions only to save citizens the gross inconvenience of a computer stoppage.