DAVAO CITY (Mindanao Examiner / May 9, 2012) – The Mindanao Development Authority has denied reports that the state-owned Agus and Pulangui hydro power plant in Mindanao is not making profits and said it actually earned some P68 billion since 2001.
Luwalhati Antonino, head of the Mindanao Development Authority, said whatever income the hydro power plant generated was eaten up by other government power assets in Mindanao.
Emmanuel Ledesma, Jr., president of the Power Sector Assets and Liabilities Management (PSALM), reported losses of up to P15 billion between 2001 and 2011 from its operation of the government’s power assets in the southern region.
PSALM is the government-owned and controlled corporation tasked to undertake the privatization of the assets of the National Power Corporation and the National Transmission Corporation, as well as the privatization of the management of independent power producer contracts.
“It is not a pure allegation that Agus and Pulangui are net income earners, but a strong position of the Mindanao power stakeholders backed by financial records of Napocor and PSALM,” Antonino said in a statement.
Antonino said PSALM’s financial statement validated Mindanao stakeholders’ stand that indeed the operations of Agus and Pulangui facilities had resulted in operating profits as was presented during last month’s Mindanao Power Summit attended by President Benigno Aquino.
She said based on financial report of PSALM, the income earned by Agus and Pulangui was used to cover operating losses of other government facilities such as coal, geothermal and diesel-fired plants.
She said those facilities accumulated a net loss of P83 billion over an eleven-year period and resulting in an overall loss of P15.03 billion for government power assets in Mindanao.
“PSALM however, failed to state that P15.03 billion was not an actual loss because of what is called depreciation expenses or non-cash item amounting to P16.35 billion. Under strict cash basis accounting policy, factoring this yields P1.32 billion real net profit,” Antonino said.
She also cited an item on amortization totalling of P5.679 billion for the 210 MW STEAG coal-fired power plant in Misamis Oriental province which should not be computed as part of losses since this represents capital lease amounting to P1.089 billion annually since 2007 onwards until 2032, when the fossil-powered plant built under BOT (build-operate-transfer) scheme shall have been turned over to the government.
Antonino further said that since the losing assets cause government severe financial bleeding then these should go first in the order of privatization. “But PSALM knows they couldn’t just do that because these are locked in under medium and long term power contracts.”
“If PSALM used up every centavo earned by Agus and Pulangui to subsidize said losing NPC assets, then it should have not allowed the hydro complex to deteriorate by allocating from its huge internally generated earnings for rehab and repair so these can continue to serve at expected generating capacities,” she said.
Antonino said if there were investments made for Agus-Pulangui as PSALM declared, these plants would have been generating now at rated capacity and not at 65 percent.
She said there would have been no supply deficits or rotating brownouts, but instead, reliable power and increased income for Agus-Pulangui complex.
“PSALM should have been more forthright with the people of Mindanao when it explains its alleged losses in operating the government’s power facilities in Mindanao. PSALM’s statement cunningly presented half-truths by stressing only about losses, but not how Agus-Pulangui saved billions of government money,” Antonino said.
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