THE winning contractor of the rehabilitation and operation of the Baguio City-owned Asin mini-hydro power plants assured city officials the company will comply with its contractual obligations pursuant to a signed memorandum of agreement (MOA).
In his letter to City Mayor Mauricio Domogan, Rodrigo Cabrera, senior consultant of Kaltimex Energy Philippines, said one of the indicators of their commitment to comply with their contractual obligations is the recent submission of their six-month action plan which is now a work in progress.
However, the company explained on the issue of the rental, particularly for the first year, he pointed that the rental for the first year should not be due until and after the prescribed conditions shall have been met.
Among the conditions requested by the company include the complete transfer of the Asin hydro plant to Kaltimex and that all the permits, water rights, right of way and such other requisites shall have been obtained and secured from both the National Government and the local governments concerned and that the facilities are fully operational.
Kaltimex already coordinated with the City Mayor’s Office for a joint inspection of all the facilities and eventual transfer of possession of the city-owned power plants to the operator.
Cabrera explained the joint inspection though remains a work in progress pending completion of due diligence equipment testing at the site which the company projected to happen only by late September given a minimum two weeks process from mobilization, hence, possession of the facilities at site has not also been effected.
He added the company has also been working on the issuance of the required permits, particularly from the energy department as the operating contract was granted to the Aboitiz-owned Hydroelectric Development Corporation (Hedcor) which is still live in the eyes of the said department.
The Kaltimex officials claimed when the issue was clarified with the renewable energy management bureau middle part of this year, it was stated the developer has no standing yet vis-à-vis the energy department while the Hedcor matter continues to remain unresolved and to date, the energy department has not ruled upon the cancellation of the Hedcor contract in favor of Baguio City which in turn shall turnover the same to Kaltimex.
Cabrera assured the local chief executive the company will continue to follow up the issuance of the required permits in the name of Kaltimex considering that the developer cannot operate the facilities without the said permits.
He stipulated the first year rental was based on the assumption that the hydro plant facilities were fully operational six months after the confirmation of the agreement by the council but unfortunately, two years had lapsed from the time of the signing of the agreement to its actual confirmation, thus, the company has yet to conduct a joint inspection whether the facilities are still functional or not.
Kaltimex will engage the services of an independent contractor to test the plant facilities and their functionality and should the facility be proven functional, the company shall commence full operations. (PR)