THE Philippine Economic Zone Authority (Peza) has rejected the proposal of the National Transmission Corp. (Transco) to operate, maintain and manage the power distribution system of Baguio City Economic Zone (BCEZ) for 25 years.
According to Tereso O. Panga, Peza deputy director general for policy and planning, the investment promoter cited Transco’s tax liability of P1.7 billion as of October 2018 for the years 2006 and 2008.
The said tax liabilities are subject of a pending application for abatement of penalties.
Transco, however, separately said it has fully settled its basic tax liabilities of P875.037 million and it awaits results of its abatement application filed with the Bureau of Internal Revenue of the remaining P855.560 million representing interest charges and penalties.
“We request Peza not to take against Transco’s [sic] this tax liability for the purpose of evaluating its financial performance and capability under this transaction,” a statement by Transco said.
Moreover, Peza said the joint venture between Transco and the Benguet Electric Cooperative (Beneco), which submitted a counterproposal for BCEZ distribution rate of P0.26 per kilowatt hour for the duration of the contract, is not compliant with Peza’s board approval to retain BCEZ’s existing distribution rate of P0.3448 per kWh for the first four years of the concession period.
Transco said that Peza neither published nor issued the content of Peza Board resolution to interested parties.
“Peza’s declaration that the joint Transco-Beneco proposal is not compliant [to criteria that were never known to interested parties, if there is indeed a criteria] is not only irrational,” Transco said. “It fails to meet the required standard of governance to be transparent in all government transactions.”
However, the Aboitiz group submitted a more superior proposal, which it has considered for a competitive challenge against the offer of Meralco as first proponent, Panga told Transco in a letter.
Nonetheless, Transco requested the Peza to reconsider its decision. It also wants Peza to include a third-party observer to provide a reasonable conclusion that the transaction might be giving unwarranted benefits to a private entity.