Supreme Court stops sale of Angat power plant


Posted at May 25 2010 07:02 PM | Updated as of May 26 2010 03:02 AM

MANILA, Philippines - The Supreme Court on Tuesday stopped the  Power Sector Assets and Liabilities Management Corp. (PSALM) from proceeding with the privatization of the 246-megawatt hydroelectric power plant (HEPP) component of the Angat multipurpose dam in Bulacan.

Newly-appointed Chief Justice Renato Corona issued a status quo order,granting  the petition filed by several cause-oriented groups that sought to prevent PSALM from formally awarding the contract to operate and maintain the Angat Dam to Korea Water Resources Corporation (K-Water).

SC spokesman Jose Midas Marqquez said there was no special en banc session held by the magistrates to discuss the petition against Angat's privatization.

He said the Chief Justice can issue an order, on behalf of the Court even when the Court is in recess, and just submit the issue when the session resumes this June.

PSALM and other respondents -- Metropolitan Waterworks and Sewerage System (MWSS), National Irrigation Administration, and K-Water, have 10 days to appeal.

The Freedom from Debt Coalition (FDC), along with Initiatives for Dialogue and Empowerment Through Alternative Legal Services Inc. (Ideals, Inc.), Akbayan Citizen's Action Party, and Alliance of Progressive Labor and Akbayan Rep. Walden Bello, filed the petition to stop PSALM from pushing through with the sale of Angat HEPP.

In their petition, the groups said that PSALM was set to issue a notice of award to K-Water last April 28, as it posted the highest bid $440.8 million.

They said the bidding process last January 11, violated the Constitution, and PSALM failed to fully comply with its mandate under the Electric Power Industry Reform Act (EPIRA).

Under Republic Act 9136 or EPIRA, PSALM is mandated to privatize all the assets of the National Power Corp., including the Angat HEPP.

The petitioners said PSALM abused its authority when it started the bidding process for the Angat HEPP without releasing to the public, critical information pertinent to the sale. These include the terms and conditions of the disposition, the parties qualified to bid and the minimum price.
The bidding process, they said, lacked transparency as PSALM refused to provide them certified true copies of documents relating to the sale of Angat HEPP and the profile of K-Water.

PSALM also violated the National Economy and Patrimony provisions of the 1987 Constitution, and the Water Code of the Philippines when it allowed K-Water, a state-owned Korean water firm to participate in the bidding process. 

The groups cited Article XII, Section 2, of the Constitution which specified that the exploration, development, and utilization of natural resources, will be under the full control and supervision of the state.

The same provision stated that the government may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least 60% of whose capital is owned by such citizens.

The petitioners said the sale of Angat HEPP to K-Water will include not only the transfer of ownership and management over physical structures of the hydro-electric power plant, but will also involve the transfer of water rights previously issued to National Power Corp. by the National Water Resources Board.

This will endanger the water supply of  Metro Manila will, they added.

The Angat Dam is the single most important water source of Metro Manila, providing 97% of the water needs of at least 12 million residents of the country's capital. It also provides irrigation to some 31,000 hectares of farms straddling  20 towns and municipalities in Bulacan and Pampanga.