GSIS wants Meralco-IPP 'sweetheart' deal annulled

MANILA, Philippines - The Government Service Insurance System (GSIS) has vowed to have the so-called “sweetheart deal" of the Lopez-owned Manila Electric Company (Meralco) with its subsidiaries nullified. In a statement, GSIS President and General Manager Winston Garcia said the P1-trillion contract between Meralco and First Gen Corp., also a Lopez-owned independent power producer (IPP), should be revoked immediately to lower down the high cost of electric power. Garcia said the private electric firm has already paid in full First Gen for the power that the Lopez-owned IPP has not delivered to its customers. “This is the mother of all sweetheart deals which has to be rescinded if we are to stop the Lopezes of Meralco from saddling us with unconscionably high power rates," Garcia said. Garcia also pointed out that the contract should not have no bearing since Meralco has violated the terms of its franchise, which is to provide the cheapest possible electric power to its captive market. "Meralco threw asunder not only the main precondition of its franchise by buying power from First Gen at exorbitant levels. It also violated provisions of the Epira Law which tasked power distributors to source power from the cheapest possible generators," Garcia said Government-run power generator, National Power Corporation (Napocor) has earlier suggested that Meralco buy its electricity from Napocor during off peak hours to reduce electric rates. Once the contracts of Meralco with its own IPPs have been nullified, Garcia said he is confident that electricity rates will go down by 10 to 20 percent. The GSIS chief claimed the electric firm is currently sourcing 55 percent of its electricity from Lopez-IPPs. "Meralco and First Gen admitted before a congressional committee hearing Thursday that Meralco had been paying First Gen in full for a fraction of the power delivered by First Gen," he said. "The claim of First Gen that it had full generating capacity is hogwash because if that is true, why is it that Meralco had to fill up First Gen's shortcomings with power bought elsewhere. They are tripping all over the place with their lies," he added. - GMANews.TV