SC asked to reverse ruling allowing sale of Angat power plant

A petition has been filed with the Supreme Court asking it to reconsider its ruling approving the sale of Angat Dam’s 218-megawatt hydroelectric power plant to a company that is owned and controlled by the Korean government. In a 10-page petition, cause-oriented groups led by the Initiatives for Dialogue and Empowerment through Alternative Legal Services (IDEALS) Inc. said the sale of the facility to Korea Water Resources Development Corp. (K-Water) violates the Philippine Constitution, particularly Article XII, Section 2. Article XII, Section 2 of the Constitution provides that “the exploration, development, and utilization of natural resources shall be under the full control and supervision of the State.” “Petitioners fear that, if traversed to its logical conclusion, the decision effectively allows wholly foreign-owned corporations to engage in the exploration, development and utilization of State-owned water and other natural resources notwithstanding the clear nationality restrictions prescribed in Sec. 2, Art. XII of the Fundamental Law of the land," a portion of the petition, filed Wednesday, read. The petitioners were asking the high court to partially reconsider its October 9 decision declaring the bidding and award of operation of the Angat Dam's hydropower facility to K-Water as valid and legal. In its ruling, the court said the bidding was transparent and objective, contrary to the claims of IDEALS Inc. and several other cause-oriented groups, including the Freedom from Debt Coalition (FDC), that petitioned to stop the sale. The hydropower facility was sold pursuant to the privatization provision mandated under the Electric Power Industry Reform Act (EPIRA). The petitioners described as "misplaced" the high court's declaration that the sale was valid pursuant to Republic Act 7718 or the Amended Build-Operate-Transfer (BOT) Law, which according to the high court "does not prohibit foreign ownership of a hydropower plant." "While it is true that under the Amended BOT Law, wholly-owned foreign corporations are allowed to undertake construction, rehabilitation and development of hydropower plants, the glaring fact ignored by the decision is that the instant case had nothing to do with the Amended BOT Law. The privatization of Angat Hydro-Electrical Power Plant (AHEPP) was made pursuant to the EPIRA and not under the Amended BOT Law," the petitioners said. The petitioners also argued that the high court erred when it ruled that power generation does not amount to the utilization of water resources. "(I)n the power generation process, water - a natural resource specifically mentioned in Sec. 2, Art. 12 - is indispensable. The operation of the AHEPP (Angat Hydro-electric Power Plant) cannot be separated from the Dam Complex from which it draws its source of power. It is unthinkable to operate AHEPP without water. How else can a hydro-electric power plant operate without water?" they stressed. In its October 9 ruling, the Supreme Court, although allowing the sale, still partially granted the petitioners' request and ruled that the National Power Corporation should keep its controlling power over the dam’s hydropower generation, subject to the rules and regulations of the National Water Resources Board. The court said the NPC should "retain full supervision and control over the extraction and diversion of waters from the Angat River,” while K-Water can use the water in the Angat Dam for hydropower generation and acquire generation assets. “Except for the requirement of securing a water permit, K-water remains bound by its undertakings and warranties under the [Asset Purchase Agreement and Operations and Maintenance Agreement or APA and 0&M agreement]; NPC shall be a co-party with K-Water in the water protocol agreement with [Metropolitan Waterworks and Sewerage System] and [National Irrigation Administration], and not merely as a conforming authority or agency,” the court ruled in the decision penned by Associate Justice Martin Villarama Jr. The court said that while the sale of the hydropower facility did not violate Article XII, Section 2 of the Constitution, the APA and 0&M agreement "contravenes the aforesaid constitutional provision and the Water Code." The court clarified that section 6 (a), Rule 23 of the EPIRA law, which passes onto buyers of the power plant’s long-tern water rights for use of water, is “merely directory, and not an absolute condition in all cases where NPC-owned hydropower generation facilities are privatized.” In the same ruling, the Supreme Court also lifted the status quo ante order it issued n May 24, 2010, which earlier stopped the implementation of the agreement of the NPC and Power Sector Assets and Liabilities Management Corp (PSALM) with K-Water. The Angat Dam, located in Barangays San Lorenzo and Norzagaray, Bulcan, supplies about 90 percent of raw water to Metro Manila and irrigates about 28,000 hectares of farmland in Bulacan and Pampanga. — Mark D. Merueñas/KBK, GMA News