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Friday, May 09, 2008
Meralco blames gov't on high rates
MANILA -- The Manila Electric Company (Meralco) breaks their silence and blamed the government instead on the high power rates the company has to charge its Metro Manila customers.
In an ambush interview after a forum organized by the European Chamber of Commerce and Industry, European Commission and RPDEV, Oscar Lopez, president of the First Philippine Holdings Corp. (FPHC), blamed government for the relatively higher rates Meralco has to charge its customers.
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"High rates are not Meralco's responsibility. Our rates are as low as we can get them. It's the government that has to cut the (Value-Added Tax) if they want to reduce (the) rate and to take out the royalties on the natural gas and they'll be able to reduce more than a peso (on) the rate. It's the government's responsibility to bring it down, not look to Meralco," Lopez said in an ambush interview during a business forum organized by the European Chamber of Commerce and Industry.
Lopez said Meralco should not be blamed on the high power rates since they are sourcing their supply to Napocor, Wholesale Electricity Spot Market (WESM), and the Independent Power Producers (IPPs).
"It's not Meralco's responsibility to lower the rates, our rates are lower," Lopez said.
Lopez also said that "it's government's responsibility to bring rates down and not Meralco," adding that one way is to first take away the royalties on natural gas.
On the reported plans of Congress and Senate to investigate Meralco's rates, Lopez responded: "they can do anything they want".
He also said that he is personally "sick and tired of this business" especially when power rates go up and they are being blamed for it.
Meralco takeover
"If he wants, he can buy us out," Lopez issued the statement as squabble between the Meralco Winston Garcia, president of Government Service Insurance System (GSIS), continues to heat up following the government's alleged plans to take over the country's largest distribution utilities.
According to Lopez, the planned takeover of GSIS on Meralco is a reversal of what the government is doing with state-run National Power Corporation (Napocor).
He said the government is keen on privatizing Napocor assets to improve its service and bring down power rates, and yet they are poised to enter and control Meralco.
Asked if he is willing to sell the Lopez's share to Garcia, the FPHC chief said "either to him or foreign investors".
"We are willing to sit down with Oscar Lopez's group in order to discuss their intention to sell," Garcia said in an ABS-CBN report.
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Meralco's shares closed P2.50 lower to P67.50 at the stock market on Thursday, after losing P2.00 on Wednesday.
GSIS owns a 22 percent stake in Meralco.
The rift between Garcia and the Lopez clan, who controls 33.4 percent of Meralco, started when the GSIS chief asked copies of financial statement and commercial transaction made by Meralco. Garcia was also reported to have been soliciting proxy votes for the incoming stockholders meeting of the company to remove the Lopezes from the board and for the government to control the firm.
In an earlier interview, Lopez said despite the alleged plans of Garcia to control Meralco, they have no plans to increase their stake in the distribution utilities.
He also denied having knowledge on the real motives of Garcia, saying "I don't know about the ultimate plan of Mr. Garcia, whether he is doing this in order to get a better price for his share because that is his main business, to go in the company and try to shake it, to get a good price."
GSIS was able to secure a seat in the board after acquiring government's 10 percent stake.
Aside from GSIS, other government owned and controlled corporations have shares in Meralco, bringing the entire government's share to 33 percent.
European investors meantime said they welcome government's effort to bring down power rates in the Philippines.
Hubert d' Aboville, president of ECCP, explained that high power rates are one factor that European investors are considering in infusing investment in the country.
"From the industry point of view, it's a good thing that the government recognizes the need to bring power rates down," he said during a press briefing.
He also lauded the decision of the Energy Regulatory Commission (ERC) and the Philippine Economic Zone Authority (Peza) to reduce the cost of power in the ecozones.
However, he pointed out that the best the government could do if it really wants investors to come in is "there should be less government involvement but more private sector involvement".
Politically motivated
Meanwhile, a senior member of the Catholic Bishops' Conference of the Philippines (CBCP) believed that the reported plans to investigate Meralco's high power rates and the alleged move to control the power utility is politically motivated.
"I, personally think that it is a political move (by the government)," Caloocan Bishop Deogracias Iñiguez said.
Iniguez, head of the CBCP public affairs committee, however, admitted that he is not well versed on the issue as it runs on a "business angle".
Iñiguez, however, advised the public to look closely at the developments of the issue, noting that Meralco is one of the foremost companies in the country that serves a large part of the population. (MSN/Sunnex)
For more Philippine news, visit Sun.Star Cagayan de Oro. (May 9, 2008 issue)
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