BAGUIO City Mayor Mauricio Domogan said Kaltimex must proceed with the agreement with the city.
Domogan said a negotiation of the approved contract is not possible at this point saying Kaltimex must first proceed with the project.
The mayor added the company might be looking for a legal way out of the contract with the city without any liabilities.
Recently, the City Council confirmed the memorandum of agreement between the local government and Kaltimex Energy Philippines for the privatization of the city-owned Asin hydropower plants.
In response, Kaltimex has asked for new conditions to the contract, to which the council has asked the comment of the mayor.
Previously, Oscar Turalba, Kaltimex Energy Philippines president and chief executive officer, said management has contemplated on withdrawing from the project because of the delayed confirmation of the contract for more than two years.
Turalba added the emergence of a third party application with the energy department, the worsening condition of the units of equipment of the power plants and the presence of unsettled claims for rentals by the affected landowners from the city was some of the factors for the supposed withdrawal.
However, Turalba assured the company is financially capable to implement the project with or without its partners as it is looking into the loans from the banks interested in bankrolling the proposed rehabilitation of the city-owned power plants.
The city is the only local government unit in the country that owns a renewable power plant which was turned over to the city by the American colonial government over a century ago.
In 1981, the local government decided to privatize the operation of the power plants and awarded the management and operation of the facilities to the Baguio Water District (BWD) which in turn allegedly sub-contracted the operation to the Aboitiz owned Davao Lights.
Eventually, the operation of the power plants ended up with the company’s sister company, the Hydroelectric Development Corporation (HEDCOR) until the expiration of the contract in 2006.
The city government took over the operation of the power plants and operated the same from October 2006 to October 2012 when the city ceased from operating the plants. (Maria Elena Catajan with a report from Baguio City PIO)