P-Noy asked to stop PSALM from borrowing P50 billion

MANILA, Philippines – Eastern Samar Rep. Ben Evardone asked President Aquino yesterday to stop the Power Sector Assets and Liabilities Management (PSALM) Corp. from borrowing more than P50 billion next year.

Evardone, a former journalist-turned-governor-turned-lawmaker, made the appeal in reaction to reports that PSALM would borrow about $1.2 billion to pay for maturing loans incurred by the National Power Corp. (Napocor).

He said the additional loans would be passed on to consumers by way of increased electricity rates.

“As of now, PSALM has four petitions pending with the Energy Regulatory Commission to increase power rates by more than P1 per kilowatt-hour. This is too much for consumers,” he said.

He said instead of borrowing funds, the agency should use the proceeds from the sale of Napocor assets to pay for the power firm’s loans.

“PSALM’s principal mandate under the Electric Power Industry Reform Act (Epira) of 2001 is to sell Napocor assets and wipe out its obligations, not increase power rates,” he stressed.

He urged the new officials of PSALM to discard their predecessors’ policy of resorting to more borrowings to pay for Napocor loans, and to be wary of “old guards” who might be feeding them with wrong information.

Energy Secretary Jose Rene Almendras revealed in a radio interview last week that he has ordered an exhaustive audit of PSALM.

He said he wanted to know where the billions of dollars in proceeds from the sale of Napocor assets have been used.

Evardone said PSALM has accumulated $13.4 billion in privatization proceeds and new loans, an amount that is more than enough to wipe out Napocor’s obligations.

“A total of $10.6 billion was generated from the proceeds of privatization. This amount includes $3.394 billion from the sale of 25 generating plants and $3.950 billion for the concession for its transmission facilities,” he said.

Additionally, PSALM has obtained $2.8 billion in new loans that it is supposed to use to pay for Napocor’s debts, he said.

“PSALM has generated $10.6 billion from privatization and $2.8 billion in new loans for a total of $13.4 billion, but it has paid only $1.3 billion of Napocor’s indebtedness. Where did the $12.1 billion go?” he asked.

He pointed out that consumers should no longer be made to pay for the debts of Napocor since the $10.6 billion realized from the sale of its assets was more than enough to pay for such indebtedness.

He recalled that in 2001, when Congress enacted Epira, Napocor’s debts stood at $9.3 billion.

“Under Epira, taxpayers, through the national government, immediately absorbed P200 billion or about $4 billion of those debts, leaving a balance of $5.3 billion,” he said.

He said if PSALM paid the balance of Napocor’s indebtedness using the $10.6 billion generated from the sale of its assets, the government would still be left with a surplus of $5.3 billion.

“But there is no surplus. They even contracted new loans. I think our people will not accept new rounds of increases in electricity rates unless they are informed and satisfied where billions of dollars in privatization proceeds and new loans went,” he stressed.

Evardone and other congressmen have filed resolutions seeking an inquiry into how these funds were used. However, the House energy committee has not yet started an investigation. –Jess Diaz (The Philippine Star)