Government contracts undergo a bidding process to eliminate preferential treatment and ensure transparency and accountability. President Ferdinand Marcos, Jr. recently called on his entire government to procure only the lowest cost. To him, this will benefit public welfare and eliminate corruption.
When those who are supposed to uphold these biddings are the ones who want to eliminate the process, it is clear that they want someone else to get the contract.
In doing so, they are essentially disregarding not only cost competition, efficiency, quality assurance, compliance, and integrity but also integrity.
Enter Senator Alan Peter Cayetano. In a Senate hearing, he reportedly wants to postpone Meralco’s bidding for its supply contract. Rates recently went up as electricity spot market prices hit the roof because of tight supply conditions. Bilateral contracts via bidding will prevent this.
Instead of helping lower electricity prices, Ergo is placing electricity consumers at a considerable disadvantage.
The terms of the bidding were thoroughly reviewed by the Department of Energy (DOE) and complied with the strict rules of the Competitive Selection Process (CSP), which ensures the least-cost power supply and is mandated by law by the Republic of the Philippines.
But for Senator Cayetano, his word should be higher than the law of the land. He suggests giving preferential treatment to First Gen’s power plants owned by the Lopezes that use the Malampaya gas from Enrique Razon's Prime Energy, even if the rates are higher.
He is pushing for these plants to get the contract to secure the market for Malampaya gas.
The truth is—competition is tight. It is not just the Lopezes who are interested in bidding. But someone on that side of the fence is worried they couldn’t win because why else create a pointless ruckus if they are confident of bagging the contract? Why not participate and bid just like the others?
He wants the bidding postponed — perhaps to tailor it more so that these indigenous gas plant users can be assured of winning. He wants to discriminate against other bidders and award the contract to the Lopezes.
It is really competitive, especially since other major companies like Aboitiz, DMCI, and San Miguel are also interested in bidding.
But that is way better because more competitors mean lower prices for consumers!
If these plants truly offer cheaper electricity, they should be able to submit the lowest bid to win the contract. But in Meralco's previous CSP for a 1,200 MW supply, the lowest price came from South Premiere Power Corporation, which offered P7.07 per kWh.
First, Natgas, which uses Malampaya gas, lost because it offered the highest price—P8.45 per kWh—and was even deemed non-compliant because the bid exceeded the reserve price.
So, the good Senator seems to want Meralco to break government rules. The funny thing is, even the interested bidders themselves, including First Gas and First NatGas, have not officially requested the postponement of the bidding.
Postponing the bidding indeed serves the interests of the Lopezes and Razon. On the other hand, it will only hurt consumers because delaying it could even expose them to high prices in the Wholesale Electricity Spot Market.
If the contracts are awarded to the favored plants that use indigenous gas even if their prices are much higher, then First Gen and Razon will unjustly profit at the expense of Filipinos. This is corruption, which is against the direction of the current administration.
Let me add that Senator Cayetano also rarely comments on energy issues, so this is a strange proposal. What is the connection here, and what should the government do to prevent this shameless proposal? It is clear there are interests at play that are so glaring and it is clear this is not consumers’.
Maybe Senator Cayetano should just keep his promise of giving each family ten thousand pesos. I have not received mine. Have you, my readers?
Comments