Board approval documents surface; Was Ledesma wrongly suspended?

by Myrna Velasco, 07 July 2015
from Manila Bulletin

Amid the drama of the past months, it emerges as a question whether Power Sector Assets and Liabilities Management Corporation (PSALM) president Emmanuel R. Ledesma Jr. was wrongly suspended from his post as documents surfaced stipulating that his actions on the rehabilitation of the Agus VI power facility had the backing of his company’s board.

For what could be considered as a bizarre twist of fate, copies of official documents sent to the Manila Bulletin would show that the decision of Ledesma to enter into a negotiated deal for the rehabilitation of Agus 6 Unit 4 came with an ‘authority’ from the PSALM Board –  as given on March 6, 2014.

It must be culled that in the ruling of the Governance Commission for Government-owned and Controlled Corporations (GCG), it was directed that he be replaced as PSALM chief executive due to “irregular transaction” he had allegedly entered into for the Agus generating unit. In essence, it was noted that his actions thwarted the mandate of the PSALM Board.

Nevertheless in that March 2014 resolution, it was stated that the PSALM board-directors approved “to implement the total replacement of Agus VI hydroelectric power plant Unit No. 4 generator, with a total project cost not exceeding the amount of P440,639.982 and shall be completed  on or before 31 July 2015 without extension.”

The PSALM management was also authorized to “enter into a negotiated procurement pursuant to the provision of Section 53.4” of the Government Procurement Act.

Some sources at PSALM have indicated that what was questioned was the ‘negotiated deal’ made with another party other than the Agus facility’s original equipment manufactuter (OEM).

But in the same documents, it was shown that a negotiated arrangement with the OEM could go beyond the approved budget cost for the project and that no specific assertion was made in the Board Resolution that any other party could be excluded in the propounded negotiated arrangement.

In a letter that was sent to Ledesma on April 8, 2014 by then Energy Secretary Carlos Jericho L.Petilla, he similarly noted that the project “has been favorably endorsed by the National Power Corporation and the Mindanao Development Authority.”

At that time, the Agus VI plant’s unit 4 was having a reduced load of just 35MW; and the rehabilitation could have helped jack up its level of generation.

Petilla then emphasized that “the Department of Energy views the timely completion of the project as a priority to contribute an additional15MW to the Mindanao grid.”

Several complaints have been lodged by PSALM employees against Ledesma, but of all of his transgressions, the Agus deal was still the ‘least expected’ that should have gotten him indicted.