CAGAYAN DE ORO CITY (MindaNews/15 May) – The Mindanao Development Authority (MINDA), as expressed by its head, wants the hydroelectric plants along the Agus River in Lanao and Pulangi River in Bukidnon to be in government hands because, contrary to claims by some quarters, these are profitable.
Secretary Luwalhati Antonino, who heads MINDA, said she presented the four-page executive summary detailing the profitability of the hydro plants – to the tune of P68 billion over a 10-year period – to President Benigno Aquino III on Monday.
“We can operate them profitably and even allot a P200-million annual budget to protect the watersheds around the hydro plants,” Antonino told reporters during a break in today’s presentation of the Mindanao 2020 Peace and Development Framework.
“Privatization is out of the question. Agus and Pulangi hydro plants should remain in government hands,” she stressed.
Citing figures they recently obtained from the Power Sector Assets and Liabilities Management (PSALM), Antonino said the net income of Agus and Pulangi hydro plants from 2001 to 2011 was P68 billion.
But these income over the years were later used to pay off the losses incurred by coal-fired and oil-based power plants amounting to P83 billion over the same 10-year period, she said.
Among the heavy losers are the power plants operating in Zamboanga City and Alabel, Sarangani province. Both plants are owned by Alsons Consolidated Resources, Inc.
She said part of the income was also allotted to pay STEAG State Power, Inc., which operates a 210-megawatt coal-fired power plant in Misamis Oriental, the amount of P1.08 billion a year.
“The government is bound to pay because of the contracts we have with these independent producers,” Antonino said.
Antonino said they are optimistic that government corporations can make a profit on the hydro plants and sustain their operations, noting that the contract between the two power plants in Zamboanga and Sarangani provinces would end sometime before 2020.
Antonino said she is now inclined in getting the President’s approval to set up Mindanao Power Corporation, a government-owned and controlled entity that will operate the hydro plants.
She said the figures and proposals for a Mindanao Power Corporation was in the executive summary she submitted to President Aquino in Davao City last Monday.
“We have looked at the financial statement. We have shown proof that the hydro dams can be operated with a profit,” Antonino said.
Ricardo Juliano, Mindanao vice president of the Philippine Chamber of Commerce and Industry, welcomed the move of the MINDA chair on the hydro plants.
“The Agus-Pulangi hydro plants are too big for one group of investors. It is the jewel of Mindanao,” Juliano said.
President Aquino earlier favored privatization, saying selling the hydro plants to private investors who have the money to rehabilitate the ailing hydro plants and expand Mindanao’s generating capacity.
The idea of President Aquino is supported by the Philippine Independent Power Producers Association who said energy investments to Mindanao are nil compared to Luzon and Visayas where government have allowed private investors to come in.
Lobbying for privatization of the Agus-Pulangi hydro plants, the groups told news organizations in Manila that investors will not build power plants in places like Mindanao because of the Electric Power Industry Reform Act of 2001.
The law mandates the privatization of the National Power Corporation, the biggest loser among state agencies, but banned the selling of the Agus-Pulangi hydro dams until 2011. (Froilan Gallardo / MindaNews)