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FOREIGN
businessmen are dissuading the government from yielding
to pressures to amend the Electric Power Industry Reform
Act (Epira), or Republic Act 9136, and also to initiate
contract renegotiations with the independent power
producers (IPPs).
In a
letter to President Arroyo, the Joint Foreign Chambers
of the Philippines (JFC) said such turnaround in major
policies would turn off local and foreign investors and
dampen their confidence.
“Amending Epira will result in a highly unstable legal
framework for the industry and investors. Further, such
action would impact the credibility and put at risk the
ongoing power-sector reforms. We appeal to the Executive
and Legislative branches of government to instead focus
its effort on implementing Epira in a timely fashion,”
the JFC said.
The
group said the President demonstrated leadership and
foresight when she signed Epira into law in April 2001
and mandated its full implementation, which will result
in the privatization of the Philippine energy sector by
2010.
JFC
praised the Power Sector Assets and Liabilities
Management Corp. (Psalm) for promising to complete the
requirements needed to begin retail competition and open
access by the fourth quarter of the year.
In a
recent congressional hearing, Psalm president Mono
Ibazeta said the remaining two requisites—the
privatization of at least 70 percent of the assets of
National Power Corp. (NPC), as well as 70 percent of
NPC-IPP contracts, will be attained this year.
The JFC
also reminded the government that threats of a new round
of contract reviews and renegotiations with IPPs will
cast doubt on the stability of policies and regulatory
rules and on the integrity of investment-promotion
programs in the Philippines.
“In
addition, it becomes a major disincentive to investors
intending to build the required additional
power-generation capacities or to participate in the
government’s privatization program. It would also hurt
many private investments that have already been brought
in at the government’s enticement. Competitive pricing
is vital to a healthy and competitive economy,” the
foreign chambers said.
The JFC
added that suggestions that may lead to caps on NPC, or
Napocor, rates will be a departure from the current
market-based pricing policy that is transparent and
reflects the true cost of electricity.
Instead,
the government should just allow industrial and
commercial customers with a consumption load of at least
1 megawatt to choose their electricity suppliers
immediately.
This,
the group pointed out, will result in pricing
competitions among the energy players, thus, making the
Philippine industries more competitive as they will be
able to get cheaper rates.
The JFC
reiterated to the President that a reliable and
competitive supply of power is important for the local
industries to be on a par with the neighboring countries
that are currently offering lower rates.
Of
course, the group said this will only happen if domestic
and foreign bankers and investors will have the full
confidence in investing in greenfield power plants.
Ric
Santos, president of the Marican Chamber of Commerce of
the Philippines; Richard Barclay, president of the
Australia-New Zealand Chanber of Commerce of the
Philippines; Steward Hall, president of the Canadian
Chamber of Commerce of the Philippines;Hubert D’Aboville,
president of the European Chamber of Commerce of the
Philippines; Toshifumi Inami, president of the Japanese
Chamber of Commerce of the Philippines; Jae Jang,
presidentof the Korean Chamber of Commerce of the
Philippines; and Shamieem Qurahshi, president of the
Philippine Association of Multinational Companies,
regional headquarters, signed the letter. |
