SMC Global urges PSALM to respect court decision

The state-run Power Sector Assets and Liabilities Management Corp. (PSALM) must respect a court decision to stop the government from terminating the contract of Premiere Power Corp. (SPPC) as the independent power producer administrator of the Ilijan Power Plant.

 

In an emailed statement to reporters late Monday, SPPC parent SMC Global Power Holdings Corp. noted  that PSALM must heed "... the 17-day temporary restraining order issued by a local court against its illegal termination of the independent power producer contract of the firm’s South Premiere Power Corporation, for the Ilijan power plant in Batangas. 

 

The Mandaluyong Regional Trial Court (RTC) has issued an order extending a temporary restraining order in favor of SPPC for another 17 days, effectively stopping PSALM from dropping SPPC as the Ilijan Power Plant’s independent administrator.

 

According to SM Global, by illegally terminating the IPPA agreement for the Ilijan power plant, PSALM was going back on its mandate, reversing the privatization of the natural gas power plant in Batangas.

 

“PSALM is reversing the privatization of a National Power Corporation (NPC) asset, in violation of its mandate under the Electric Power Industry Reform Act (EPIRA),” according to SMC Global, a wholly-owned subsidiary of San Miguel Corp.

 

In ignoring the decision by the Mandaluyong RTC, PSALM claimed that only the Supreme Court (SC) has jurisdiction to issue a TRO in this case.

 

But SMC Global cited Section 38.8 of the IPPA agreement which says: “... exclusive venue of legal processing or actions arising out of this Agreement should be in the courts of Metro Manila, and each party irrevocably accepts… the jurisdiction of the aforesaid courts.”

 

Late last week, PSALM said it has terminated the contract after SPPC failed to settle unpaid generation payments despite repeated demands in 2013 and 2014.

 

"There being absolutely no dispute on PSALM’s demand for the subject unpaid generation payments, PSALM sent SPPC a final demand letter on 10 August 2015 for the payment thereof, which by then had already amounted to P6,460,973,606.46," according to PSALM.

 

SPPC asked the Mandaluyong RTC to nullify the termination notice and stop PSALM from drawing against the performance bond to cover the claim.

 

The IPPA contract allows SPPC to manage the power produced by Ilijan, while the plant is operated by the Korea Electric Power Corp. by virtues of another contract with the government. – Jon Viktor D. Cabuenas/VS, GMA News