SMC’s Ang scores PSALM, DOF for Ilijan power-plant ‘debts’

By Lenie Lectura – June 5, 2019
from Business Mirror

SAN Miguel Corp. (SMC) President Ramon S. Ang on Tuesday called the attention of the Power Sector Assets and Liabilities Management Corp. (PSALM) and the Department of Finance (DoF) which insist that the conglomerate’s power business settle its alleged debts on its 1,200-megawatt (MW) Ilijan power plant.

“This is bullying. They cannot just dictate on what works best for them. We have to follow due process,” Ang said. “Respect public bidding. We won this bidding. Stick to the terms and conditions of the contract.”

For the DoF, Ang suggested it might want to tap the consulting services of an expert.  “They don’t understand the power business. They should hire a professional consultant to advise them. We bought this power plant through public bidding.”

The Finance secretary is the chairman of the PSALM board.

SMC is reacting to PSALM’s insistence on pursuing collection efforts against SMC over the Ilijan power plant, citing they also need to service their own obligations. “If [PSALM] has mismanagement issues, don’t blame us.”

SMC, through its South Premiere Power Corp. (SPPC), reiterated it has already paid P289.1 billion or $6.19 billion in various fees as of end April 2019 for the 1,200-MW Ilijan power facility in Batangas, contrary to recent claims that it owes PSALM P19.75 billion in unpaid dues. PSALM has also already gained P34.75 billion from its Administration Agreement with SPPC.

With this, Ang said he could not help but wonder where SPPC’s payment went.

“We are just wondering what PSALM did with all the money they made out of our administration agreement on Ilijan since 2010. The public has a right to know; we all have a right to know how they are running things there,” Ang said.

“These are funds that government should have put to good use such as vital public services and social programs.”

The company added that the amount it paid for capacity fees alone, which is equivalent to about $2 billion, is already enough to pay for the 20-year-old power plant. A brand new plant with the same capacity could be built for so much less.

SMC, through its power subsidiary SPPC, filed a case against PSALM in 2015 after it terminated the 1,200-MW Ilijan IPPA due to differences in computation of generation charges.

SMC, however, recently won against the government after the Mandaluyong Regional Trial Court denied PSALM’s motion for reconsideration, saying it found no strong and compelling reason to reverse its earlier ruling.

Separately, the Supreme Court also decided in favor of SPPC when PSALM challenged the Court of Appeals’ decision to affirm the writ of preliminary injuction filed by SPPC with the Mandaluyong RTC. PSALM, it said, “failed to show that the CA committed a reversible error in the challenged decision and resolutions as to warrant the exercise of the court’s discretionary appellate jurisdiction.”

“We continuously honor our obligations. In return, we only ask that they respect the sanctity of our agreement,” Ang said.