QUESTIONS over transparency in operations and national security aspects of the National Grid Corp. of the Philippines’s (NGCP) deal with a state-owned Chinese firm have drawn attention once more to the delayed initial public offering (IPO) of the country’s sole power transmission company.
Fielding questions about the delayed IPO of the NGCP, Senate Energy Committee Chairman Sherwin Gatchalian said on Wednesday the IPO is in fact “one of the safeguards” that could ease apprehensions about NGCP “because allowing the public to participate up to 20-percent equity of this company will improve the government’s structure of this operator, meaning, [the] public can participate in the governance, as well as look at the books and operations closely.”
The senator stressed, in an interview with ANC, that “this is really one of the most important feature of this franchise—that the public should participate—and I would strongly suggest that NGCP should pursue its initial public offering, and I would like to strongly suggest also the government takes a share, a stake in this IPO, so that [the] government will be well represented in the board.”
This, even as he suggested that the government should also be able to “regularly engage the decision- makers of NGCP insofar as national security is concerned, insofar as public issue is concerned.”
Reminded that this was way past their initial deadline set for January this year, Gatchalian noted that NGCP had sought an extension from Energy Regulatory Commission, citing its current disputes with Transco as basis for delaying the IPO. “And my view on this [is], the IPO should be pursued, the market will factor in all of these issues surrounding the IPO. The market is well aware of the concerns and the arbitration happening surrounding NGCP, so let the market factor in and price all these through the IPO.”
The pending arbitration case between Transco and NGCP “is a commercial matter between them,” the senator noted, adding, “…but my view here is national security takes precedence over commercial items, commercial matters and because of this national security issue, the IPO should proceed.”
As far as he is concerned, added Gatchalian, “The IPO will enable the government to participate, enable the public to participate and this participation will improve transparency, and this is what we need in the management and also in the scrutiny of NGCP.”
The Senate’s Energy committee chairman said “the safeguards are already in place, we have to implement the safeguards, one of which is the IPO,” as it allows the “government and the public to scrutinize closely NGCP and its operations.”
Gatchalian added that “it also gives it a greater sense of transparency if they offer their shares to public. What’s important now is to implement those safeguards because without implementing those safeguards, everything will be in futile.”
Asked how these issues affect the NGCP’s development plans, Gatchalian asserted that “what is important right now is government exercising its check and balance role,” suggesting that the “NGCP should allow government to go deeper into the inspection—not only superficially inspect the facilities of NGCP, but also allow it to go inside the facilities, look at the facilities at the Scada system…because the Scada system is the system that can enable remote control and management of this facility.”
Transmission development
AT the same time, Gatchalian affirmed that the transmission development plan is “a very important document that lays out plans of the transmission operator, meaning where the transmission lines are to be put up? What are the transmission lines that we need to upgrade?”
This, he said, is intended “to improve the flow of electricity from the different islands of the country. It is important that we continuously maintain, upgrade and expand the transmission lines because this will enable efficient flow of electricity to our household and to our businesses.”
However, he admitted that “we also received documents that said that a lot of the investments were in fact delayed, 33 important projects were already delayed under the transmission development plan.”
According to Gatchalian, “a delay in the rollout of this transmission facilities will also delay a lot of the power plants that will go into the system. Even though we have a lot of power plants going into the system, but if we don’t have enough capacity in the transmission lines or if the transmission lines will not be put up, then we will have problems with electricity shortage.”
Asked what was causing those delays, the senator explains there were “various reasons and that is what we want to go deep into, we want to hear valid reasons, not only reasons that are made up out of thin air, but what we want to analyze is, how come the transmission development plan is not being carried out to its mandate? We want to also look at the penalties that should be put forth if ever the transmission development plan is in fact delayed.”