There’s basis for voiding deal with NGCP, revoking franchise – Transco

May 5, 2017 - 12:36 AM
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An NGCP tower tilts after being licked by a recent fire at a residential area near the Alabang viaduct. This time, NGCP is caught in a burning issue over its alleged violation of its concession agreement with Transco. FILE PHOTO FROM MICH OROSA OPLE, NEWS5

MANILA – The National Transmission Corp. (Transco), which owns the transmission facilities being operated by the National Grid Corporation of the Philippines, is insisting that the government has a basis for cancelling the concession agreement with NGCP, and even taking away the company’s franchise altogether.

Among others, Transco is taking issue with NGCP’s having given telecommunication companies clearance to lay down their fiber-optic cables on its transmission towers, and failure to declare the revenue it derived from this arrangement and sharing it.

NGCP has denied Transco’s accusations and said its books are open for government to examine any time.

Nonetheless, according to Transco president Atty. Melvin Matibag, NGCP has clearly violated several key provisions of its concession aggreement with Transco.

“As far as i am concerned, there is enough basis to rescind the concession agreement, based on what I have seen,” said Matibag.

First, he said, none of the contracts embodying the clearance given the telcos to use the transmission towers for the fiber-optic cables was passed upon by Transco, the Power Sector Assets and Liabilites Managament (PSALM), or event the Energy Regulatory Commission (ERC).

Matibag showed photos indicating some old facilities were torn down to allow for the laying down of fiber optic cables.

Second, Matibag said, while the concession agreement allows the NGCP to enter into “related businesses,” the EPIRA requires NGCP to return 50 percent of its revenue from such related businesses to consumers by way of reductions in their transmission charge.

Transco said it had not been shown any document indicating that NGCP is following these provisions. Moreover, there are no separate accounts reflecting such related businesses.

Third, besides the non-transparency of NGCP’s related businesses in the fiber-optic cables, the government was not even allowed to inspect the facilities, as part of plans to have a national broadband plan.

Matibag pointed out that, “the owner of the facility is still Transco, the government. So kung hindi ka nagpaalam, you can draw all the conclusions, puwedeng pinagkakitaan hindi pinaalam sa publiko dahil ayaw ibigay yung share ng publiko [So if you didn’t get clearance, one can conclude that someone made a profit but did not declare it to avoid having to share it with the public].”

‘Bordering on criminal’

Such acts, Matibag warned, are “bordering on criminal and administrative and civil” violations.

His office is “preparing documents to be filed, after presentation to the Office of the President,” said Matibag, adding they have to seek guidance from the President and [energy] secretary.

Meanwhile, Transco appealed to Congress to review the franchise it granted NGCP, with a view to: removing such franchise for the alleged violations; possibly canceling the concession agreement allowing NGCP to operate and maintain Transco’s facilities; or renegotiating the terms of the contract.

“It might be a painful process, but if that is the only way to correct the wrong being done, then we must go through that process,” said the Transco chief.

“We want to level things; maybe we can sit down and really talk, renegotiate the terms of the concession agreement to make it responsive to all parties concerned,” said Matibag.

The Department of Energy has thrown its support behind Transco on the matter.

DOE Assistant Secretary Bodie Pulido III said Matibag is acting upon the instructions of [the DOE] secretary. Napakasimple po ng mandate–ano yung mga paraan na puwede nating gawin para maibaba ang presyo ng kuryente [The mandate is so simple: what are the ways by which we can bring down electricity prices].”.

NGCP’s side

For its part, NGCP said it has no contract with any telco on a fiber optic network.

The fiber optic cables the company has now are all owned by the NGCP itself, and are being used to track the entire power grid.

It is only now that the entire system has become ready to accept proposals to use it for a
national broadband project of the government, NGCP said.

At this point, according to NGCP’s Atty. Cynthia Alabanza, the revenue issue has not yet been explored because there is no revenue to speak of. “Hindi pa namin napag-aaralan nang husto, kasi wala pang ganung klaseng usapan with any entity.”

Alabanza said, “we are open to any entity that wishes to explore this. We are open to all, but will give priority to the government’s broadband project.”

The existing cellsites are covered by co-location agreements that were signed even before the NGCP came into being in 2009.

Under Section 1 of RA 9511, the NGCP
franchise law, “the grantee is authorized to engage in, construct, install, finance, improve, expand, rehabilitate and repair the nationwide transmission system and grid of the Republic of the Philippines, ancillary busines, and any related business which maximizes utilization of its assets such as, but not limited to telecommunications system.”

According to the company’s concession agreement, it has no obligation to pass through Transco with regard to its related related business in the use of the transmission towers.

Still, said NGCP, its books are open to the State.

Alabanza said, “we are not legally required to get their prior consent based on the concession agreement. But that does not mean that we will , contrary to any allegation, that we will conduct this business surreptitiously or in secret because this is a legitimate business allowed under our franchise.”

Alabanza assailed “insinuations [that] we are doing this behind the backs of certain entities,” adding that such “is simply untrue.”

NGCP said it is ready to answer all issues raised in court, if necessary.