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Tuesday, September 20, 2005
Benguet board member prefers delay in power firm's privatization
By Jane Cadalig
A MEMBER of the Benguet Provincial Board (PB) said he would prefer the delay in the privatization of the National Power Corporation (Napocor), at least until all issues regarding payment of taxes claimed by the province from the power company are settled.
"It would be better if privatization is delayed so as not to further complicate the problem," said Board Member Juan Nazarro Jr.
He said he was reacting to a resolution from the Provincial Government of Ifugao, which is asking their legislative body's support, on a request for the House of Representatives to conduct an inquiry on the delayed privatization of Napocor and the National Transmission Corporation (Transco).
The committee on public utilities, chaired by Board Member Apolinario Camsol, recommended support to the Ifugao resolution in its report, but the board deferred acting on this suggestion.
This developed, as Nazarro explained that once Napocor is privatized, the province would have a hard time collecting the unpaid real property and franchise taxes from the power firm.
"If Napocor is privatized, all its properties will be sold by the Power Sector Assets and Liabilities Management (Psalm) thus we will have a difficulty in demanding the amount. We will not be able to determine, who will pay the taxes we are claiming, if it would be Psalm or the private entity that would be buying Napocor," the alderman explained.
Benguet is currently billing Napocor an initial amount of P113 million in franchise and real property taxes, inclusive of surcharges and interests. The amount, which is yet to be finalized by the Provincial Treasurer's Office, represents Napocor's unpaid obligations to the province from 1994 to present.
The Napocor however claimed it is exempted from paying real property taxes, saying the properties being sought by the province to be taxed are machineries and equipment being used for power generation.
Lawyer Rainier Butalid, Napocor vice president for general counsel, said they being a government-owned and controlled corporation, they are exempt from payment of real property tax on machineries and equipment used to generate electricity.
Butalid said such an exemption is stipulated under Section 234 of the Local Government Code.
(September 20, 2005 issue)
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