Energy chief bares P1-B TransCo-Hanjin 'midnight deal'

ABS-CBN News

Posted at Aug 02 2010 08:55 PM | Updated as of Aug 03 2010 04:55 AM

MANILA, Philippines - State-run National Transmission Corp. (TransCo) wanted to release some P1 billion as payment for transmission line assets of Korean shipbuilder Hanjin Heavy Industries Corp. in what the Department of Energy (DoE) dubbed as an attempted "midnight deal" during the last few days of the Arroyo administration.

DoE Secretary Jose Rene Almendras confirmed to ABS-CBN News that such amount was allocated by the budget department for TransCo, and the dubious deal was in the works soon after the May 10 national elections were held.

Almendras, however, said the midnight deal was foiled. "Investigations are ongoing and the funds are safe."

Documents culled by ABS-CBN News also showed that President Arroyo issued Executive Order (EO) 701 in 2008, mandating TransCo to acquire the transmission assets of Hanjin even though the agency was already in the process of privatizing its own assets.

The EO also stated that TransCo could request a budget for the acquisition.

Alemdras is questioning why the government-owned firm had to buy the transmission lines when most of its assets have already been turned over to the National Grid Corp. of the Philippines (NGCP).

"There are inconsistencies. Transco is supposed to be liquidating assets, why is it buying then?" he said.

Hanjin officials declined to give their side, saying their Korean office is handling the issue.

TransCo has been selling transmission assets to qualified power distribution utilities since it began its privatization program in 2004.

In 2007, Monte Oro Grid Resources Corp., which owns NGCP, won the 25-year concession to operate the TransCo with a bid of $3.95 billion. Monte Oro has been associated with businessman Ricky Razon, an ally of President Arroyo.

NGCP, which took over the TransCo in January 2009, is the new operator of the country’s electricity superhighway. - Report from Alvin Elchico, ABS-CBN News