MANILA - The National Grid Corporation of the Philippines' (NGCP) failure to debut in the stock market may lead to the cancellation of its franchise, Senate Energy Committee chair Sen. Sherwin Gatchalian said Wednesday.
Under the franchise agreement it signed in 2008, the power transmission operator is required to "make a public offering of the shares representing at least 20 percent of its outstanding capital stock or a higher percentage" within its first decade of operations.
The deadline for the NGCP's initial public offering (IPO) lapsed last January.
"If they will not pursue IPO then they violate their franchise. That is a signal to Congress that the franchise can be revoked," Gatchalian told ABS-CBN News.
The IPO stipulation was placed in NGCP's contract with the government because "this natural monopoly cannot be put in the hands solely of the private sector," he said.
"It is such a vital infrastructure imbued with public interest and national security... [We should] let the public also earn from this natural monopoly, but more importantly, let the public participate in the governance of this natural monopoly," he said.
The NGCP earlier told the Senate Energy Committee that it delayed its stock market debut due to its ongoing disputes with the National Transmission Corp. (Transco) and the Power Sector Assets Liabilities and Management (PSALM).
NGCP should not proceed with its IPO while its concession agreement is under threat, the power transmission operator said.
The dispute among the country's energy players give lawmakers more reason to push NGCP to go public, Gatchalian said.
"Gusto ko makita ano ba ang nangyayari sa loob ng NGCP?" he said.
(I want to see what's happening inside NGCP.l)
Under the law, the NGCP can ask the Energy Regulatory Commission (ERC) to extend the 10-year deadline for its IPO, but members of the House Committee on Energy earlier threatened to withdraw the NGCP's franchise to end the power transmission operator's monopoly.
The Senate Energy Committee is set to schedule another congressional probe before deciding if it would also cancel NGCP's franchise, Gatchalian said.