THE National Electrification Administration (NEA) has advised the Zamboanga City Electric Cooperative (Zamcelco) to purchase maintenance vehicles and not luxury vehicles because of the cooperative's financial conditions and system loss.

The NEA comment was in response to a board resolution of Zamcelco approving the acquisition of 14 brand new Kia Sport Utility Vehicles.

Updates on President Benigno Aquino III's presidency

"We understand that the service vehicles referred to are maintenance vehicles needed by the different departments, sub-offices and engineering area offices and not sports utility vehicle (luxury vehicle) as stated in the Board Resolution," read a letter of Mariano Cuenco, NEA Deputy Administrator for Corporate Resources and Financial Services, to Zamcelco Board president Rolando Gregorio and general manager Reinerio Ramos.

NEA's advise against the purchase of the luxury vehicles was based on two grounds: the financial condition of Zamcelco, which has a net loss of P76.33 million and accounts payable-power of P479.58 million as of September 30, 2009 and the cooperative's system loss of 16.72 percent as of October 2009, which is above the cap of 13 percent.

The letter came in the wake of assertions by Zamcelco officials that the purchase of the luxury vehicles had the tacit approval of the NEA.

Meanwhile, Zamboanga City Mayor Celso Lobregat wrote a letter last week addressed to Bueno officially asking the NEA to conduct a fair, accurate and objective financial, technical and institutional audit of Zamcelco operations.

The City Council authorized Lobregat to communicate with NEA amid allegations of irregularities in the purchases made by Zamcelco.

"I believe that as of the moment the more appropriate action is to ask NEA to conduct the audit," Lobregat said stressing that the NEA is a government-owned and controlled corporation (GOCC) with numerous powers that include the close monitoring of performance of electric cooperatives in the country.

The last NEA audit on Zamcelco operations covered the period April 2007 to August 2009 and Lobregat said the agency can continue the audit to cover the coop's operations until 2010. (Bong Garcia)