Asin developer told to honor contract

MAYOR Mauricio Domogan urged the management of Kaltimex Energy Philippines to proceed with the rehabilitation, upgrading and operation of the city-owned Asin mini-hydro power plants.

“The best thing for Kaltimex to do is to start implementing its obligations under the contract and if the company wants to raise some issues, the same could be done later and if we find merit to such issues, then we could discuss the possible solutions,” Domogan said.

The local chief executive revealed he recently received a communication from Kaltimex, signifying desire to discuss with him their sentiments on the project.

Domogan said Kaltimex is looking for an excuse to free the company from paying potential damages to the city in case it withdraws from the contract.

Kaltimex earlier wrote the local government to express its desire to withdraw from the contract it signed for the rehabilitation, upgrading and operation of the city-owned Asin mini-hydro power plants, which have been idle for over four years now.

In 2006, the City Government took over the operation of the Asin mini-hydro power plants from Hydroelectric Development Corporation (Hedcor) after the expiration of the 25-year lease agreement with the said company.

In 2012, the Energy Regulatory Commission issued a cease-and-desist order directing the local government to stop operating these power plants because it lacked the required certificate of compliance from the regulating agency.

In 2014, the Special Bids and Awards Committee declared Kaltimex as the successful bidder. The contract was signed and submitted to the city council for confirmation in the first quarter of 2015. This was confirmed only in January 2017, or nearly two years later.

Domogan called on Kaltimex officials to seriously review the provisions of the contract to determine their duties and responsibilities within the next three years, the prescribed rehabilitation period.

The mayor admitted having written the company’s bonding company for the same to forfeit the P150-million performance bond posted by Kaltimex in compliance with the contract for the company to post a bond equivalent to 30 percent of the project cost before it will proceed with the detailed works that it will undertake for the eventual operation of the power plants.

Domogan said the local government is doing its best to make sure the local government will benefit from the possible operation of the city-owned power plants so it can generate additional funds for the implementation of development projects and enhance the delivery of services to the residents. (PR)
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